Yeah, the product positioning here is awful; it's like someone just went through the marketing copy at the last minute to strip out its ad-centricity. My very cynical guess is that it went like this:

#1 Wait, couldn't the ad designer you've been working so hard on actually be used by anyone to just make web pages?

#2 Well...I mean I guess so, but it wouldn't--

#1 Awesome! It's really a Google Web Designer! This can be a much bigger PR splash than just a nice tool for making ads! Gotta think outside the box. Generalize.

#2 OK, but the actual goal here is to make it easier to create ads, and the product's completely designed around--

#1 BAM! Name changed! Two minutes to create a whole new product. That MBA has paid for itself in spades!

I think that's the charitable view.

More likely:

#1 "we need an ad builder tool"

#2 "OK, but it can do more than ads..."

#1 "Good one. Then it it will seem like we're giving back."

#2 "?"

#1 "Don't worry. Just make sure the focus of using the app will be ads. That will help our users the most, and provide the biggest impact with our limited resources."

I know what you're saying, but "appealing" and "eye catching" effects are generally mutually exclusive (to the user that isn't interested in the ads, but the content...).

Yes, they are.

One of the other purposes of Advertisements are also to create impressions and Branding. You don't have to necessarily click every ad. :)

And with such visual tools ad making is very easy and reachable to all. A great project by Google. Kudos. With Visual tools like this we can interact with more depth. And lets not forget this is free too.

They might bring better ad-making experience overtime with built in ad-templates. All this will bring more Appealing ads.

And Eye catching ads serve as — Branding and Brand-remembering for Publishers, users notice them and remember(clicks not important in Branding)