Here's the real reason they're doing this:

To guarantee that they will be able to learn from 100% of all internet searches/activities online. Their business is making money off your searches. However, companies like Facebook, Amazon (and to a lesser degree in-app searches) are stealing that functionality from them. The more searches you do directly in Amazon (or in the future in Facebook ) the less Google will know about you, the less intelligent their searches will be and the less money they'll make.

However, if Google is the ISP, they'll be able to learn from EVERYTHING you do on the internet. Doing a search directly on Facebook? Google will watch that and learn what you (and millions of others like you) mean by your search terms and what's important to you. This will not only improve Google search, Google voice-dictation, etc but they'll also use it to make a smart interface into the Google Fiber TV and internet similar to what XBox now does. Google's looking to be your interface into everything, even before you hit your apps and websites. They're not trying to embarrass the cable companies/ISPs. They're trying to reinforce their information/search/learning monopoly.

More Info on Google and why they do what they do:

The Real Purpose of Google+ is Data Mining: http://www.readwriteweb.com/archives/google_was_never_a_facebook_competitor.php?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+readwriteweb+%28ReadWriteWeb%29

Google+: http://techcrunch.com/2012/02/28/no-more-no-more-no-more-no-more/