Domain registrars end up with a long tail of customers holding small numbers of domains. If Google sells a .com for $12, most of that goes to Verisign, and they're stuck with a customer who will get agitated when "their domain doesn't work." Many registrars use domains as a way to upsell hosting or premium domains (e.g. GoDaddy, Namecheap, Gandi) but the median Google Domains user is unlikely to be attracted to GCP.
Google dislikes having to deal with customers at scale (free users are fine as you can ignore them) and domain registration is high on the list of businesses where you end up with large amounts of customers expecting a certain level of service coupled and almost no margin to provide it.