It is only a natural next step in a process started a while ago. Here is a quick, and probably not exhaustive recap:
Google+ has no open RSS output, hence no PuSH support, no write API, in fact it has absolutely nothing open
Google Reader is scrapped, along with RSS support within Chrome
WebDav for Google Calendar is dropped in favor of their proprietary API
XMPP is dropped, while 3 years ago it was at the core of their Wave efforts
The problem Google has with open standards is that they don’t generate substantial revenue for Google. Google doesn’t make money selling services to users, it makes money selling users to services via targeted advertising. It can’t do that if we’re using their services in 3rd-party apps.
I can use Google Reader via Reeder, Gmail via Mail.app, Google Calendar via iCal and Google Talk via Adium. All these apps remove any need for me to visit the relevant Google product page whatsoever. Google is starting to see these types of users in the same light that coffee shop owners see people who come in, take up an entire table and just use the free wifi without ordering a drink. Unfortunately, rather than enticing these people into buying something, Google’s just going Amy’s Baking Company on them and throwing them out.
Most people only used Google Reader as a syncing API for 3rd-party apps and would never use the actual site, that’s at least how I and many others used it. How could Google possibly monetize that? The same can be said for Google Calendar and Google Talk, if everyone used 3rd-party apps instead of the respective Google site then how can Google make an any money?
I don’t have any problem with Google’s decision to abandon XMPP with Hangouts, in fact it makes good business sense. If they can lock you in to a specific Google app then they’re more likely to generate some revenue off of you. It’s similar to Apple’s iMessage, that’s a closed service that helps Apple sell devices and, therefore, make money.
What I and many others have a problem with is the hypocrisy Google have towards open standards. Google started playing its pipe, luring users with a promise of free, open alternatives. Services such as Google Reader and Calendar became so popular because we could use them with any app we wanted, not to mention that and their API was substantial enough that many developers took advantage of that fact. But after a while, Google started playing the pipe for its own ends, shutting down or reducing services, and is now forcing their followers back into the very ecosystems they wanted to escape from.
iMessage is actually no different from Hangouts, both are proprietary and require a specific app to work. Unlike Hangouts, iMessage never started out as an open service, only one for iOS, so no expectation on interoperability was set. It’s that very expectation which Google had set that is the crux of the issue.