I share your disappointment.
As for what happened, I assume real world happened. Google needs to make money, jut like everyone else.
For a long time, we have been very lucky to enjoy the privileges of using products made by a company whose primary objective wasn't to make money (because they were making it anyway), but to genuinely shape the internet of the future, products that just work (the "Don't be evil" motto). The new Google pushes products like Google+ and Google Drive, that don't seem that revolutionary or different, or even necessary, given the existing options out there.
The "pushing" is to me the worst part. Google prided themselves in listening to user's feedback, and taking their work one way or the other depending on that. I get to this forums today after uninstalling a Google Drive that I installed right when it was released and turned my cloud workflow into a not-so-user-friendly experience. Took me a while to find my way to where you are meant to give feedback (it's right below the multiple paragraphs saying how great Drive is and how much you should love it regardless). It's frustrating to find that no matter what users think of Google Drive, "Google Drive is great". Not so uncommon in today's world, but new and surprising for Google. So great it is that changing back to "Documents" after uninstalling is still a temporary one, and they'll roll Drive out as part of our consumer experience, just the way they consider we should have it.
Maybe I am exaggerating. I am heartbroken after all. Google still has great products that make my life so much easier, and maybe the interaction with them hasn't changed so importantly. But my perception certainly has, and I know I'm not the only one. I knew it was a matter of time, but realising the time has come makes this day a sad day.