There are two concerns:
1) Security of email messages in transit, assurance that you're receiving emails from the person who claims to be sending them, etc.
2) Preventing your email service provider (and any MITM) from reading your emails.
These concerns are relatively independent of each other. While if you're a die-hard PGP advocate you'll want both 1 and 2, PGP-in-Gmail gives us 1, and that's a pretty great start.
Right now we have neither, and we're all much poorer for it.
PGP-in-Gmail instantly gives it to everyone that has an @gmail account (and anyone else who has signed up to a WoT). It would probably insist that you use two-key authentication. And it would work like this
0) Every message you send is automatically signed by you by default.
1) type in >=1 email addresses in To: bar
2) If all of the email addresses you sign have public keys associated with them that Gmail can locate, they all look "Green" (or whatever) and the [Send] button becomes [Send securely].
3) If any of the addresses doesn't have a public key associated with it, then nothing is encrypted (i.e., exactly the behavior we have now).
If you don't trust Gmail, you shouldn't trust it any less if/when they deploy PGP for it. And no one is saying you have to use it. All I'm saying is that Gmail, Hotmail, etc. seem to be the best equipped to trigger the widespread adoption of PGP.