They extinguished their own service by killing Google Talk and replacing it with Hangouts. They never dropped XMPP from Talk, they just never implemented it in Hangouts. Talk and Wave really started Google's churn of messaging apps, which has seemed to just hurt themselves.
> They never dropped XMPP from Talk, they just never implemented it in Hangouts.
ISTR that they did back off of XMPP support in Google Talk to some extent a bit before that last move. Something about not allowing incoming connection requests from non-Google accounts by default IIRC.