People are not the memoryless automata that statistics handles best. People react positively to a bad change up to a point where they don't anymore, you don't even need to keep changing to trigger this.
Take a look outside your window. Have you understood quantum physics yet? No? I guess all of the available data doesn't help you, because it still requires effort and careful observation to glean insights from it.
The same goes for Google. Data by itself does not guarantee anything. You can look at a piece of data and not reach any conclusion, or reach the wrong conclusion. More data does not mean more insight.
In my field (biology) we are suddenly drowning in data - we are producing new datasets much faster than we can analyze them. Our understanding is not increasing at a commensurate pace because we lack the ability to turn these data into useful knowledge.
That doesn't mean it's good for the web, but "what (the most) users want" is Google's strong point. And this is par for the "the internet is now 4 websites" course, so I don't think it's possible to claim that this isn't "how the internet works" anymore.