If Reader users were dropping off because Google crippled Reader, then the "users were dropping off" argument lacks teeth, though it does make for a great self-serving justification. First you make the product worse, then you point out that people aren't using it as much, then you kill it.

(This is, incidentally, the sort of strategy Republicans have w/r/t public services: they want people to think public services suck, so they start defunding or corrupting the relevant offices. Then the services become worse. This becomes a justification for more defunding or just shutting the things down.)