True, but I feel like the market for Google's VPN is people who would NOT otherwise bother to use a VPN at all. They'll only bother to use this because it's free and pushed right into their face.
Vastly reduces MITM attacks, and makes your traffic mostly invisible to the internet provider, be it a public WiFi, or a private network at a friend's house.
It should, given that Google can essentially see everything you are browsing via the Web. I'm sure to some degree they get plenty of data from most us, however using their VPN would likely give them ALL of your traffic. That's my assumption at least.