No one is talking about highest quality experiences here, we are talking able fully functioning, stable experiences.
There are too many potential issues from streaming that movies and TV aren't affected by. The convenience is incredibly compromised to the point where it could be a deal breaker for way more people than you think.
I'm not rooting for this to fail, but everything says that this'll be a secondary gaming experience complimentary to consoles for those who really want a gaming experience when they are away from one.
Google wants you to think that Grandma is going to stumble upon.an Assassins Creed vid on Youtube and start playing it instantly or something but the realistic scenario is that hundreds of millions of consoles will be sold in the next 5 years and will continue to be where people do their gaming.
You're jumping around in your argument that it's hard to keep up. First you say image quality is super important so that they can see what they're targeting, but then you say well not the highest quality to show why people don't go for the Pro, X, or PC. I'm saying the image quality will take a hit but not to the point where you can't see anything and makes it unplayable. I think it will be good enough for plenty of people for the sake of convenience. Not good enough for my tastes, but good enough for a large amount of people out there.
I'm assuming this will be reasonably playable; it's not like we don't have examples of this already including Google's own test that people have played already a few months ago. I think when you remove the fact that you don't need a high end PC, let alone even a decent PC or a $400 console, that becomes a compelling barrier that is taken away combined with a convenience of simply clicking on their browser to play. The combination of the two is a huge factor that I think will weigh in for enough people to be attracted to the concept. The hardware barrier alone is huge and we can't discount that.
Personally, I would love this to fail and all streaming initiatives to also fail because I'm one who doesn't even like digital copies of games. However, what I want and what the reality of the market is are two different things. As much as I fight back for physical copies, better quality, and consumer rights, I know for sure that people are willing to give up those things for the sake of convenience. Saving hundreds of dollars in the process will be a huge swaying factor too.
I don't expect hard core fighting game tournament players to like this, but as it clearly shows, plenty of people play fighting games online when other people would call it unplayable. I think you're not giving enough credit in how people don't notice, won't care, or will simply adapt for the convenience factor and saving a ton of money in the process.