Honestly, I think he was right. Google has a really bad image problem right now where lots of people don't want to get involved with their projects because Google will most likely kill the project just like Reader and Glass.
See my couple of wasted Google Glass devices that will never see an Android update again. Do you think I'll ever buy a Google Android product after they wasted $3k of mine? Do you think I'll buy any more of their tech device blunders like cars or thermostats or other devices? Likely not. It's well established they'll just drop them soon after release anyway.
They are getting the same reputation for software services. There are lots of startups that would have been happy with Reader's usage numbers besides, so they aren't even making decisions everyone would agree are good kills.
With my Android apps, any time someone sends me a bug report or a complaint, I refund them immediately and thank them for the feedback. Does this make me the most money? Hell no. But I have a lot of friendly users who email me constantly with improvements and who aren't mad I'm ripping them off or screwing them over. That's worth a lot too. Google is saving money to screw over users with this Google Code decision and it's definitely not one I agree with.