I think immediate consumer convenience can turn into a bad consumer experience once the company providing it becomes the monopolist. Monopolies do bad things to customers in the long run. So we can end up with large consumer inconvenience and unhealthy economic ecosystem. I prefer a little less convenience now and let competition improve it a little bit or keep it at a reasonable level.
What can Google do? What is the possible negative long term impact here?
We're talking about a website and a phone OS. You can start using another search engine in five minutes and will probably replace your phone in a year or two anyway. There are plenty of alternatives, including forks of Android that will likely work with your current device.
Gmail at least owns its users' addresses. But here they have nothing except being useful. Local grocery store has me in a tighter grip.