Yes, ad blockers aren't big right now, but Safari on iOS and Samsung Browser on Android has ad blocker support. What happens if Apple or Samsung decides to bundle an ad blocker? Google wants to defend against any future moves.
Already, other browsers have led on tracking protection and control of third-party cookies, affecting Google's business model. So Google built Chrome, invested in it so people would prefer it, pushed it on their websites to ensure people would prefer it, and built a walled garden with Chrome Sync + Passwords.
Then they started using it to decrease privacy by signing in to Chrome when you sign in to Gmail. They track your websites visited and use it to improve their advertising even when the website doesn't use Google ads.
Theirs is the only password manager for Android which is limited to their browser. That's for a reason.