The core problem is that Google Reader is old code. It originated back in Google's early days (well, 2005 is sorta early), when they didn't have any well-defined internal API's. So Google Reader depends on deep dark secrets of Google's actual infrastructure implementation, rather than using a well-defined internal API that will keep working when the infrastructure changes. The result has been that Google Reader has continually experienced outages for the past five years of its life as the infrastructure changes. It's costing Google money to keep hacking at it to keep it running, and they're not making money on it. And fixing that would require a re-write to a stable API in common with other products that wouldn't break anytime that the infrastructure changes -- something they're not going to do on something that's not making them any money.
I guess the takeaway from this is simple: Turning everything you do into an API is hard, but the alternative is that bit rot will eventually kill your code. This is, for example, why I created a complete virtualization infrastructure for the Intransa virtualized cluster product that hid all details of virtualization behind an API. The reality is that we only needed to touch ESXi in a handful of places -- but by hiding the details of that behind an API, I guaranteed that when we moved to a different virtualization system in the future (such as Xen or KVM) then all that would need changing would be the virtualization API, not any of the internal workings of Storstac. This is also one of the things that Linus has been fairly successful at doing over the past ten years or so with the Linux kernel. He may have broken the block subsystem by applying the big-kernel-lock removal patches, but at least he didn't break the API. Some additional changes have been added to the block API so that filesystems like BTRFS can work better, but the core API still remains the same as it's been for quite a few years now.
But clearly this wasn't done for Google products back in the early part of the '00s, and now it's just too difficult to maintain the less-used code. Google has to upgrade their infrastructure -- and how their infrastructure works -- in order to continue to scale. What that means is that products that weren't written to a consistent internal shared API are going to continue getting sloughed off, unless there is enough interest (and possible money to be made) to justify a re-write against a stable API. That's just how reality works. Oh well.