They made their model so hard for people to drop into workflows, that people just... didn't.
Lack of adoption caused them to lose out on usage-based training data needed to smooth out their model's rough edges and progress the frontier.
Google gains very little by having us use their models for coding. It doesn't help them in their core mission ("to organize the world's information and make it universally accessible and useful ^W^W^W^W^W^W[and turn it into ad revenue]"), nor would it be anything close to substantial revenue compared to the ads revenue firehose they already have.
They will push AI in a direction that serves their existing goals and service the coding agent model only as is necessary.
If Googles goal was something other than those, why expend Billions in time and effort? Alternatively, they want a part of the regular model use pie, they just struggle to compete. QED, there is no secrete alternate goal here.
There's likely all kinds of internal competition and disagreements and dysfunctions.
So there's that.
But in the last instance, revenues win. OpenAI and Anthropic have to fight for new revenue sources while Google already has a firehose. The motivations are fundamentally different.