Google isn't a monopolist in this situation either, but it is useful to understand pricing dynamics where there is no competitor. It sheds light on price discrimination with coupons, for example.
Krugman mischaracterizes the article[1], since it does not claim that Reader was crucial infrastructure, but he doesn't argue that it is crucial infrastructure himself either. They both talk about the dynamics of a product that has network effects and becomes a public good.
We generally know from cognitive sciences how we economize in situations like having a reliably knowledgeable colleague. This has served as a counterpoint to the silly arguments about how Google is making us stupid, but nevertheless says that the specialization in our expertise that it facilitates has Google search's continued availability as a vital component.
The original article talks about whether discontinuations will cause users to be more cautious about adopting services that create dependencies, and whether it will inhibit the success of new ones that involve network effects.
>Google wants us to use its services in ways that provide it with interesting and valuable information, and eyeballs. If a particular Google experiment isn't cutting it in that category, then Google may feel justified in axing it.
>But that makes it increasingly difficult for Google to have success with new services. Why commit to using and coming to rely on something new if it might be yanked away at some future date? This is especially problematic for "social" apps that rely on network effects. Even a crummy social service may thrive if it obtains a critical mass.
Anyway, the important issues aren't perfectly typified by Reader, but it is a situation people are familiar with at this moment. Personally, I think it is worth thinking about why more of the shuttered projects haven't been sold off or at least open sourced like Wave. Combine that with profitable businesses that are acquired for the talent, then neglected to death, and it sounds like a lot of effort is being needlessly trashed.
It is not difficult to imagine that if books.google.com were able to give even more liberal access to its library, that struggling municipalities would be even less willing to fund their libraries. This hypothetical would be unambiguously good for the world if it lead to more access to information, but one can also imagine that this hypothetical could also lead to a dependency that was itself vulnerable.
There are a lot of things that won't lead to the end of civilization, but they can still be nevertheless worse than an alternate outcome.
[1] http://www.economist.com/blogs/freeexchange/2013/03/utilitie...