Say you're a journalist, and anonymous sourcing is your whole career. Google Buzz auto-populates follower lists for you, and automatically shares them with the whole wide world. That means you're fucked if you're a journalist, a political dissident, a woman trapped in an unhappy marriage with a violent, abusive, criminal husband, a doctor who performs abortions in Baptist country, or anybody else with a perfectly legitimate reason to expect Google to respect their privacy - like, for instance, anyone who is friends with any of these people.
It's in Google's interest to promote their new product. It's also in the company's interest to make the existing customers happy. In a private company charging consumers money for a product, it's easy to see which of these two priorities is more important. In a public company, where neither product is directly tied to the revenue stream, the prioritization will be made internally via an entirely opaque process of corporate politics that has nothing to do with pleasing customers and which places a much higher priority on impressing "journalists" like Mike Arrington, who may have the ability to raise the company's stock price.
This is a special case of the tragedy of the commons, in which the best free product in a company's stable becomes the launch point for many other inferior products which cannot stand on their own. The tragedy of the commons is an economic rule of thumb which basically says that any common property will eventually be wasted in the pursuit of a relatively less valuable personal gain by some member of the group that owns the property in common. In tech corporations, the less valuable personal gains have to do with jockeying for position: whoever is in charge of maintaining the valuable existing property Gmail was less important in the corporate political games at Google than whichever fool "pioneered" the Facebook/Twitter "me-too" product Buzz. The Buzz muppet found a way to shit on the Gmail monkey's project, every Gmail user suffered as a result, and no feedback will make its way back to Google in an appreciable way, because the absence of any economic give-and-take between Gmail and its users means that communication between Gmail and its users about new features and their sanity or insanity is fundamentally one-sided and slow.
The other night I spoke with a member of my career consulting program who lives in San Francisco and actually gets a higher hourly rate than I do. I felt like an idiot and for a few moments wished I still lived in San Francisco. The disgusting spectacle of Buzz pissing on Gmail, the most beautiful thing that Google ever did, has completely eradicated that feeling. Silicon Valley is infested with monsters.