We welcome all reports of security vulnerabilities, we try to fix them quickly, and we credit the researchers - but we offer rewards only for higher-impact flaws. You can check out this page for more info:
http://www.google.com/about/appsecurity/reward-program/
In this context, phishing issues are tricky. Because many of our products simply have to do things such as displaying snippets of potentially attacker-controlled text and multimedia, we try to evaluate phishing concerns on a case-by-case basis. In essence, we ask ourselves how easy it would be to exploit a particular behavior to mount a convincing attack.
My take on this bug is that the attack vector is severely constrained in well-behaved e-mail clients; and that in badly-behaved clients, the existing exposure is already considerably worse than any incremental hazard caused by this flaw. It's valid and worth fixing - but does not quite meet the bar for the reward tiers set up for higher-impact bugs.
Here, we handled the communications poorly, and I think it's OK to call us out on that. In fact, I think it would be wrong to offer a reward in hopes of buying silence from the reporter :-)
The phishing attack I described in my blog post affects all e-mail clients that are able to render HTML and CSS. As for rendering remotely included CSS, this was not necessary, as one might as well include a <style> element.
If you are referring to just GMail as a well-behaved e-mail client, you are most likely correct that it wouldn't be possible to create a legit-looking phishing e-mail (as GMail only allows in-line styles). I think that most other e-mail clients allow the use of <style> or <link> in e-mails. The screenshot of the "phishing e-mail" in the blog post came from Mail.app (version 6.5)
I intentionally did not classify this vulnerability as "Cross-Site Scripting", although XSS vulnerabilities also rely on injecting HTML content, as the main impact here was not the execution of Javascript code in the user's e-mail client, but rather changing the visual output of an e-mail so it can be used for phishing.
In this case a bug was filed, but it took some prodding to get it fixed.