I don't know about Google in particular but I've always been bothered by the market sizing question.
In part, it's because it seems to have come out of consulting, where a common task seems to be to size a market for which there is no commonly available data. So, understanding how someone might go about doing that seems reasonable on its surface.
But in fact, I've met too many consultants who seem inclined to build "castle in the air", spinning market details about theoretical markets without properly defining either the product or service or the buyer of that product or service. And since they are for markets for which there is by definition no solid data (since that is why the consultant was asked to size it in the first place), their estimate is never validated (or if it is, it is so long after they have left that they never hear about.)
At the same time, no one ever seems to mind if the answer to such questions is off by a country mile when the actually size of the market is known, so long as the thought process was rigorous and shows the right kind of logical decomposition of the problem. But this justification for the value of the question also bothers me, as it seems to be testing more whether you can come up with convincing-sounding bullshit than whether you can correctly estimate a given value. This, again, may be an accurate measure for whether someone can become a consultant, but I never liked the notion that we should judge people on how well they can spin bullshit.
Finally, the question seems to also be gauging the interviewees willingness to "play along" with what an interviewer is asking. The questions are often on seeming random topics (piano tuners in New York or gas stations in Wisconsin), and are often not directly related to the domain. In the real real world, you would actually probably find a list of such things on the internet, or conduct some basic research that can be done to answer such a question. Or the correct response might be something like, "We can make a rough estimate, but without more solid data than a few random facts which we've rubbed together to come up with a market size, maybe we shouldn't be pursuing this market". In which case, the contrived example serves to allow the interviewee to demonstrate that they are the type of person who will enthusiastically pursue whatever random intellectual exercise they have been assigned by the interviewer, so long as there is a chance of getting the interviewers approval.
All of the things that the question tests for, then, seem to not be characteristics you would actually want in someone if they were to answer the question in the real world. In the real world, you might do a back of the envelope calculation, sure, but you would also do a lot of research on the internet, conduct a lot of interviews and surveys, and/or conduct evaluations of competitors to understand and size a market.