I think it's more useful in the US, but more importantly, it stands to become much more useful as more AI-personalized services are rolled out. The downside is that Google needs to have the information in my file for it to be useful (or to build a shadow file without my knowledge).
Paying at least makes explicit the bargain we're striking. As opposed to Google offering me something for free, then having every incentive to suck as much money out of what they can glean from me, I'm instead simply paying them for the true cost of the services I consume.
I think Google is very much thinks that if you start paying, you might eventually look for alternatives. And that'd lead to a pricing war. And so on.
And, more importantly, if they roll out a new service and you start using it, you'll immediately start thinking about the cost of using it. Or people will start to "demand" more for their money. (Things like support.)
On the other hand, in their favor, if I was paying for Google then I'd still be using it. And in the absence of new government-mandated information portability laws, they would still be able to have a file on me -- and therefore offer superior services than their information-less competitors.
But I do think you're right about the "branding" issues. They don't want to broach that can of worms because it reminds people that things aren't free and Google is making money to pay engineers and shareholders somehow.
Second, if you worry about your file getting in the wrong hands (either now or later), then paying them won't help with that. To provide the services they provide they need to have that file.