You raise a valid point about not knowing exactly what is being installed, but the flip side of the coin is that security fixes and new feature support get adopted much faster.
It's nice knowing that mom's laptop will automatically receive that security patch.
Even though I still use Firefox personally, this is why I've transitioned every family member to Chrome.
I like knowing what's installed on my computer. I realize that I'm going to have to go into the future kicking and screaming.
The only thing which you don't really know anymore is when or to what version it is currently updating. But why would you care anyway about that.
It's also possible to turn off the autoupdates.
It's debatable what the best default setting would be, and wether or not average users:
a) know how to disable this b) care to disable it
Like you say, it necessitates a level of comfort with a company. I suppose most people don't give this a lot of thought, and thus feel pretty comfortable with any company.
Wether this is "good" or "bad" is a separate discussion imo.
The browser update policy is a great example. Probably the world would be a better place on average if mom and pop auto-updated, but the policy has serious downsides. For one, it's a pain for me as a geek who likes to know what is running on his machine (and who, frankly, doesn't trust Google as far as he could throw it). It's also a pain for me as a web developer, because of the various breaking changes Google is demonstrably willing to make in its browser, as discussed in several recent HN threads.
There are other problems with "one size fits all" that I think undermine the entire premise of the article, though. If Chrome is to be the new OS, then does that mean every application front-end in the world has to be written in JavaScript? On the evidence to date, this is not going to be a success...
Similarly, "[Google App Engine] just runs the code you give it, and you don’t much care how" sounds like a great argument, until you realise that you have to write your code using the tiny fraction of the available programming tools that happen to be supported by GAE.
Given that in this business, the two most common scenarios are keeping geek opinion on your side or your company failing rather horribly, I think we can safely assume that nothing Google offers today is even close to comprehensive enough to displace native apps and make cloud/browser software the norm. Oh, and if the article author thinks that broadband-speed wireless is going to become as ubiquitous as electricity within a few years, I think he probably needs to go back to physics school. :-)
Also, on Linux systems Chrome does not automatically update. When you download the deb/rpm from Google it sets up a package repository (e.g. by adding a file like /etc/yum.repos.d/google-chrome.repo) and you get updates via the usual package update mechanism on your system. I have no idea if this will ever happen, but it seems like if there was a better integrated update system for OS X and Windows then Chrome on those systems could have an option to work in a similar way.
I know that when one installs Chrome, they are implicitly accepting that it will update itself, but it still is a very unique behaviour that wouldn't be accepeted in most programs.
If you think about it, the only reason we want the control is because we don't trust software companies not to mess up our system. The crazy thing is wanting manual updates, because it implies gross incompetence from the software industry.
Well. Gmail doesn't actually install anything on your machine.
In the case of gmail, I rely on their code only for checking/sending mail. And they have access to just my mail data. When something runs on my machine, I need to be a lot more careful about what data that code has access to and what privileges it has.
The majority of Chrome users have no idea that their browser is silently updating itself without their knowledge or consent, and if they did, they wouldn't have any idea how to shut it off.
I can think of plenty of cases where most users would want to turn it off—tethered to a slow data network, throttled bandwidth, etc—but the precedent it sets bothers me more than any hypothetical inconvenience. It's like I'm suddenly, unknowingly leasing a little space on my machine to Google, and I'm not always sure what they're installing.