As far as I see it there is something of a chicken and egg problem here. Google has often maintained, publicly, that its search algorithm is only interested in providing the most utility to end-users.

To an extent (and in some cases, I except that there are exceptions) this holds true:

If I google for a video streaming website I want Youtube to be at the top of the list. Semantically that is the correct answer to the "question" implied by the search.

So:

Are google services popular because they are highly represented in google's search results?

-OR-

Are google services highly represented in google's search results because they are popular.

I absolutely do not believe that google should feel pressured to artificially demote its own offerings over fears of anti-competition litigation/legislation. On the other hand I can see an argument for clearly marking a result that points to a google service as 'belonging' to google.