As a bystander, this comes across as "we aren't smart enough to figure it out", or "we are smart enough, but this is a business decision with ulterior ("evil") motives". Neither of those look positive for Google.
I don't expect multi-person video conferences to work, but plain old textual messages, as already work today, shouldn't be a problem.
Wanting to maintain a competitive advantage is not evil in and of itself. Google Hangouts is far from a monopoly and they are under no obligation to make every product completely open. Not only would it be competitively stupid, but it would also hinder product development to be so heavily tied to standards publication.
Google has a marketing approach of being different by not being "evil", being open & accessible, and having smart people work there. The steady drumbeat now is one of being no different than the other guys. Google held themselves up as taking the high road, which is why so many are calling them out on this (and why people don't call out other companies for the same antics).
The issue isn't even about making hangouts open, but rather about chat messages in hangouts also being able to relay with federated XMPP servers - something GTalk does today just fine and has done so for many years.
As a bystander, this comes across as "we aren't smart enough to figure it out", or "we are smart enough, but this is a business decision with ulterior ("evil") motives". Neither of those look positive for Google.
I don't expect multi-person video conferences to work, but plain old textual messages, as already work today, shouldn't be a problem.