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I think the core insight here is right, that as far as they were concerned it seemed silly to miss out on a chance to sell their "google-scale" experience and know-how in many cloud/distributed contexts.

But similair things were true for lots of dead products, and google's willingness to launch a large number of products and only keep the ones that gain massive market traction shows just as much paranoia about ending up with a stable full of lqggards and weak brands.

If user growth flattens out after two years, be nervous.

Google Stadia games needs to be customized for Stadia. For how long will developers continue to make Stadia versions of their games?

What will happen to the service when the people first involved have moved on and they have trouble finding engineers wanting to work on something that's not brand new? Wasn't that why they cancelled Reader?

Stadia uses custom hardware that they had to make specifically for this, so this is at least unlikely ;)