I think the problem is having to buy games on top of the sub.
For me, if it was a “Netflix for games” deal, with a decent-to-great games selection, I think £10/month for streaming would probably be fine, so long as it worked well 99% of the time. I would no real qualms about subscribing to that, and if Google did go “Oh, we’re randomly giving up on this because we’re Google and it’s what we do!” in three years, I’d note down what games I found fun, and be like “Oh well”, and if there were any good games which were exclusive to the service, likely someone would find a way to do non-streaming releases or bring them to another streaming service eventually.
So that would be fine.
Whereas with this “Digital purchase” but stream-only model, from a psychological perspective it’s totally different. Every purchase I make is a big potential risk, because I don’t even have access to the software itself. It’s not installed. I can’t back it up. I can’t crack it. I can’t record it like I can even with streaming video or audio (yes I know you’re not meant to, but it’s relatively trivial to do it if you want to).
This isn’t the same as Steam, because if Steam’s servers and staff were banished from existence today by an angry warlock, some enterprising dude would have a cracked authorisation server up to make Steam or a cracked version of Steam work within 3 days, and every game on Steam would be a torrent or similar within a month.
So the idea of paying full-price or even Steam-level discounts for games that I can only play as long as Google, who let’s be real, are completely mercurial and unreliable, feel like I should be able to, seems like madness.
If they eventually have a ton of games on the sub, I could see myself looking at this as a machine for certain circumstances.
I actually wonder if the real long-term solution, and I just thought of this, is a middle-ground, one I think companies may initially oppose but may also work out because it could be quite popular, which for individuals to buy games, which are stored in the cloud, and played on virtual machines, but where we actually own the games, and can use a different virtual machine, transfer them to a different cloud, and so on.
As I said, I think this would be strongly opposed, but I do think things might well shake out that way.