More than 97% of Google's revenues have always come from advertising (give or take a few percentage points). This goes back to the pre-IPO days. It's all well and good to say that Google is about "pushing the limits of human knowledge," but when you're a public company with a responsibility to generate return on capital, you need to protect and grow the golden goose.
Now, it's perfectly valid -- maybe even necessary -- to look at Google's situation and declare it highly vulnerable. Any company that relies to such a singular extent on one product is in a precarious situation, because any fundamental disruption of that one product's market will sink the entire ship. Historically, Google had attempted to future-proof itself by functioning like an AdWords-subsidized R&D lab: using its massive and easy profits to pay for all sorts of cool, out-there, innovative technologies. But over the years, none of these technologies was proving itself commercially viable in a meaningful way. So Google could be forgiven for shifting to address the threat of social in general, and Facebook in particular, to its core advertising business.
To put it another way: when Google had no meaningful competitors, it could afford to play around with its money. When a serious competitor finally emerged, Google decided to put the toys away and focus.
It's easy to apply 20/20 hindsight and say that Google+ was never going to be the answer. But that wasn't always obvious. In fact, I remember when Google+ was first running its invite-only beta, and the HN community was singing its praises. And to this day, social integration with search seems like a good idea. Google may (or may not) be too late to own social search, but it wasn't fundamentally wrong about realizing that social was a paradigm-shift in web behavior, and not simply a passing fad.
Now, I can't speak to the author's complaints about the company culture. I have never worked at Google. If, as the author says, the company has stifled its atmosphere of innovation and creativity, that is a damned shame. (But I'd like to see more evidence to support this theory). The idea of forward-thinking R&D (20% time, etc.) seems like it should still be a core part of Google's culture -- especially for the sake of fostering a highly productive and innovative environment.
But it seems too easy to look back at Google+ and say that Google had fundamentally lost its way. From the standpoint of Google in 2010-11, Facebook was the first serious, potentially existential threat the company had ever faced. In a way, it would have been irresponsible for Google not to have put a lot of eggs in the social basket.