Google, in particular, has killed over 70 services and thereby acquired a reputation for now-you-see-it-now-you-don't. I don't doubt that Google had too many products that didn't mesh with each other, and they are preoccupied with reinforcing Google+ which shows no signs of effectively competing with Facebook. Nevertheless, aside from Google's core products -- the search and ad engines, Youtube, Gmail, Chrome, Android, and Maps -- whose discontinuance is unthinkable, I'll think twice before getting hooked on another Google product. For that matter, Google is getting sloppy with product quality too. I've had a few instances of long-standing bugs in Google products that they apparently have no desire to fix.
In the case of iGoogle and Google Reader, I researched and identified alternatives, registered for them, installed the iOS and Android apps, learned how to use them, and migrated my data into them. I admit that it's not heavy lifting, but it's irritating because I have better uses of my time. The primary restraint on a provider's killing a service (or providing poor service) is the impact on its reputation, but this an indirect restraint at best. The unfortunate truth is that the real customer of a free service is almost always an advertiser whose wants and needs the provider attends to. The service is merely honey for users to view the ads and click the links. It's an effective strategy, but every strategy can be jeopardized by bad execution.
And while I'm railing at free services, remember that if you encounter a difficulty in using one, don't bother to contact the provider. They won't pay for anyone to take your phone call or provide you individualized assistance by email. At best, they will provide an online forum where other users might assist you -- but usually the provider waits for users to organize such a forum themselves in self-defense.
Innovation on the Internet is a good and powerful thing. Just beware of the pitfalls.