Why is the minimum lifetime of data set to 3 months? Is it because 3 months sounds like a reasonable period of time for users to look back at their usage or is it because Google needs 3 months to process the data, for marketing or other money making purposes?

The reality is whether they keep the data for 3 months or 18 months doesn't mean anything. It just gives you the illusion that they no longer use your data. I find it hard to believe there's good intentions behind this (other than deleting data AFTER it's used).