I think it can be mostly attributed to taking too much investment and not vetting investors enough. The investors started shoveling in a bunch of MBAs around 2000 because they wanted big returns. Thats what led to getting into the ads business, going public, buying youtube, etc. "Good MBAs" are great for making sure profit goals are hit, but they almost always ruin just about everything they touch to do it though...
But by the time I got out of grad school in 2007, I was like "meh, it's mostly an ad platform, not so exciting; maybe someday". Now, there is almost nothing you do to get me to work at what I see as a company whose capacity for destruction is only limited by its manifest lack of any coherent vision. Fortunately, they seem to be tripping on their own feet recently, but if they ever get it together, it could be bad for everybody.
Some of that is probably down to my own changing priorities and increasing cynicism about our industry's effect on the world. But most of it is, I think, attributable to a change in Google. But what changed? Was there a specific moment when Google stopped being "cool", for lack of a better word? Or was it an accumulation of small problems? Were they never actually cool, and they just lucked into a couple neat products?