The gist is, Google (and Microsoft) are brands that are already associated with "web-scale" software. So, if they make something new, people expect it to be engineered to be web-scale from the beginning, not a bloated prototype that relies on other tiny/bloated third-party services (and definitely not on services from their competitors.) I think this is just an image problem, though—couldn't Google get around this simply by not saying that the projects are "by Google" until they're popular? Publishers call this an "imprint."
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The gist is, Google (and Microsoft) are brands that are already associated with "web-scale" software. So, if they make something new, people expect it to be engineered to be web-scale from the beginning, not a bloated prototype that relies on other tiny/bloated third-party services (and definitely not on services from their competitors.) I think this is just an image problem, though—couldn't Google get around this simply by not saying that the projects are "by Google" until they're popular? Publishers call this an "imprint."