"even in a plain-vanilla market, a monopolist with high fixed costs and limited ability to price-discriminate may not be able to make a profit supplying a good even when the potential consumer gains from that good exceed the costs of production"
The whole blog post is an analysis explaining why that's true. "Evil Google" may have set people off (but it's pretty clear from TFA that Krugman's not calling Google "Evil"), but "monopolist" is pretty central to the article.
If you want, you can take his post as a counterargument to the "why wouldn't Google charge for Reader" question: it's possible that they could not have charged a price that made it profitable. Without any data, who knows if it's true or not, he's just showing how the logic would fit together.