"When I'm looking for the answer to a question, when I'm looking for directions or my next appointment, or directions to my next appointment, when I'm getting routed to interesting articles that I want to read, Google provides more utility the less time I spend on site."
Google's decision to shutter iGoogle is exactly the type of decision that runs counter to the idea that you posed above. While I appreciate the Mobile paradigm on a Mobile device, I think that it is ill-suited for the desktop environment. A Dashboard utility such as iGoogle is much better suited for the Laptop/Desktop model, and doing away with it is doing a great disservice to the users of their products, be they Gmail, Calender, Reader, Tasks, or Android Devices.
The alternatives Google has suggested (implied really as they have made nothing as useful as a suggestion for an iGoogle replacement) with the alternatives being direct competitors of Google, which seems a terrible business decision, or third party providers of Dashboard services which unnecessarily exposes the Android/Gmail user base to unnecessary third party risk over their data should they choose to expose their Google account to these third party applications as the alternative to iGoogle seem at best short-sighted.
While some have rightly pointed out that the users of the free services that Google provides are not their customers, it seems that Google has lost sight that these users of their free services are actually the product which they are selling to their customers. It is the targeted advertising based on all of the data which Google has mined from our emails and search histories that Google makes its revenue from. If they do not cultivate that product, instead turning their backs on that base of users, they will run the risk that lose a valuable asset in the process. It are those eyes and those clicks that they count on to make their money, and if those eyes and clicks are looking at Bing or Live or Yahoo or Netvibes instead, then Google is losing revenue to those competitors.