They aren’t eliminating it, just downranking it. Given Kagi’s search quality, ad and tracking density seems to negatively correlate with site quality.
So on Google you miss out on things that might otherwise be hidden gems because Google wouldn't rank it as highly.
There are tradeoffs on both sides.
That said, I am still quite opposed to js that tracks users across the internet for advertisement purposes. I do use ad blockers despite the fact they block a lot of less-harmful tracking by default, which I don't love, but it's too much work to differentiate between. (At least adblock users are the minority of internet users in general, so hopefully Analytics users still get enough data to be helpful for their purposes.)
I'd much rather get information from an individual or small group who is intrinsically motivated and is not just looking for the lowest bar of quality that won't make folks immediately bounce.
I also want to note that just putting Google Analytics on there doesn't kill the site's ranking. There are some sites that are just infested, and those are what get dramatically downranked.