The GDC stream where this was announced stuttered multiple times on me. Hardwired gigabit internet connection. All it takes is one serious gamer to lose due to input lag or a sudden stutter and they're going to want an actual console again.
You seriously overestimate how high the bar is for immersion amongst the common consumer, and underestimate how good game streaming currently is. You're also making a false equivalence fallacy with your GDC comparison - the factors by which your live stream being viewed by potentially 10s of thousands of people at the same time stutter are fundamentally different from the kinds that would likely make a single player game you're playing via cloud do the same. If it's multiplayer, these are the same factors that literally already effect multiplayer games now, and is not magically special because it's being streamed.
Youtube is a free service where you can pay to have the ads removed. The ads are completely tied to being free. EA is one company doing something objectionable that is completely unrelated to games streaming. You implied that games streaming + google would somehow = ads on games, as if that's a foregone conclusion or something. It's not even a little bit.
Well, this is new.