The market for these loss-leading services is skewed because Google subsidizes their free offerings so that they improve their ads branch. Because it is hard to compete with a free (actually money-losing) service, it is very hard for competitors to spring up. And thus the whole thing is anti-competitive.
If they were separate companies and had to compete on their own merit, not subsidized by the ads division, they'd have to ask for money too. Then, competitors actually have a chance to offer something better. And through that, the reach of the ads business is limited unless they start to work with the competing services. This opens up the market for other ad markets, too.
And then we are a step closer to the free market that is efficient and good for consumers.