That's seems reasonable to me. If I violate their TOS or in any way act immoral, they have the right to ask me to remove my content from their server. If I refuse to do so, it's completely within their rights to take it down themselves.
"Non-Performance Clause: How Google Puts All Risk and Liability on App Engine “Customers”"
AKA, you're responsible for your data. If something goes wrong and a commit fails, Google isn't responsible, just like if a MySQL query fails, you don't lay the blame on Sun. Again, this sounds pretty reasonable.
"Personal Data Capture Machine: How Google Usurps Private Consumer Information"
In the interest of full disclosure to my customers, I'd be more than willing to say "We use the Google Apps Engine!"
This article seems like one big mess of FUD. Google is providing some cool services at no cost. You don't like it? Go somewhere else.