I suspect it was rushed out when someone actually paniced about "the competition". There's rumors Facebook is starting it's own e-mail service and the social network just scaled back it's ad relationship with Microsoft. It is clearly growing competition and has 400 million+ users compared to Gmail's 120 million+ (I believe those figures are roughly right).

It is feasible Google did this on purpose too. I can't remember where I read the article, but it suggested this was an expected reaction to Buzz and the fallout was worth dealing with due to the free promotion Buzz got from it. Kind of like the car recall offset against potential deaths/lawsuits caused by faulty parts scenarios. Put simply: it was worth the bad press to get Buzz integrated into millions of accounts now.

Buzz is here to stay whether we like it or not. What's worrying is Google were prepared to push this out to millions based on the feedback of 20,000 Google staff.