For me personally, this is the most stupid statement since the "war on terror" nonesense from a few years ago. The reason this is so stupid is because there are almost zero services that you do not pay for in order to use them, and Google makes none of these services.
I pay Google with ad impressions so I can use their search engine. Google can turn these ad impressions into money, so it is as good as dollars to them.
In order for me keep paying Google, they have to make sure I want to keep using the product. Just like any other subscription model.
It is also wrong that if you pay through ad impressions, you can expect less quality or service than if you pay money. There is no evidence that this is the case, and it makes no sense at all. There are plenty of cases where a company does not support an application after users payed for it, or customers complaining about bad support for products they spent money on.
Finally, you are never the "product being sold". First, that would be slavery and a crime. Second, I'm sitting here writing this with my free will, so obvisously nobody has sold me yet.
Google's first priority is still to get users to use their products and be happy with them. Just like it is with any other paid service out there.