Well, I disagree. (Though I think your record of things is correct!) Certainly if you look at this as a bot war then Google’s actions make sense: we need our bots to outsmart the ‘bots’ (human bots even!) that are writing blogs.
But look at it another way: you have lots of humans writing - and it’s all of varying quality. Why not let the humans decide what’s good? The early Web was curated by humans, who kept directories, Smart.com ‘expert’ pages, websites and blogrolls that tried to show where quality could be found. Google’s bot war (and the idea that Google is the sole authority on quality) eliminated these valuable resources as collateral damage.