They actually pushed ChromeOS and web services (GMail, Inbox, Docs, Sheets, ... ) pretty hard and realized that its not the way to go forward. While for lightweight tasks (like emailing and docs) it works pretty well, for heavy tasks (like video editing) and most importantly, as a development platform, chrome os din't do well.
So they pivoted to Fuchsia OS. A new OS to provide seamless experience across several devices (in home or in vehicle while commuting. Some of the resource can be living in cloud). Its a sort of networked OS. Streaming music to your Google Home, let me fetch that music form the Fuchsia Desktop's cache and stream it to Google Home, rather than fetching it all the way from Cloud.
With out applications, OS is not much of use. Here comes Flutter. Let the developers make apps for Android and iOS in Flutter (currently over 50k apps on Google Play store) and have them run the same app on Fuchsia OS. I believe it will take probably another year or two for Google to bring in Fuchsia to Pixelbook. Let's hope so! I would like an OS as open as Linux, with macOS like user experience.