If they had released this two weeks later, iOS 7's auto-update feature would have bricked everyone's accounts. Google Auth 2.0 redefines two-factor auth: something you know + something you DON'T have. Their entire purpose in life is this second part and they completely and absolutely botched it. I can't believe this passed testing at both Google and Apple. There wasn't even a warning in the release notes.
"Something you Have"-type tokens provide security basically because they're immune to rubber-hose cryptanalysis: if you really just don't have the key to a safe, nothing an attacker does can make you give it to them. As such, tokens are also the factor that protect you from contempt-of-court charges if you're compelled to provide it. (Though they can then ask you "who does have a key?"; if this is an accomplice, it's best if they live in a separate country, and hopefully one which doesn't like the US very much.)