You know, I've seen this statement on almost every thread about Google Reader, and it seems to be one of those things that everyone is just giving a pass to.
Google's entire hiring and organisational model is (or at least should be) predicated on hiring great people to get things done. This is how every well run technical company operates. This idea that we all need "senior management attention" or "product manager" love is something that comes out of dysfunctional organisations without a shared vision. Could you imagine this statement being made about some of the tech company darlings here (37Signals, Github, Stripe etc.)?
If you're going to put a product in maintenance mode (or even slow growth) with a team who understands it, you don't need senior management attention from on high.
Also, the reputational risk is just a laughable statement to make. Look what happened reputationally just now - that's not going to go away any time soon and you better believe that it was much worse than someone coming along later and saying "Oh no, Google reader is so unchanged from 3 years ago, I hate Google." Anecdotally, I don't even know anyone who uses Google Reader directly, they all have dedicated apps.
All these arguments are poor. Or, at best, if they're true, they signal that Google has really lost its way - it's now a behemoth organisation that requires senior management oversight on every single product offering, and any non-spectacular product could at any instant bring the entire organisation down with its combination of toxic legal and toxic risk.