Larry & Sergey are only humans. They can get bamboozled by people just like anyone. And they are in a situation where the very best bamboozlers are trying to bamboozle them, all the time. The people "failing up" are, in some cases, the Lebron James's of bamboozlement.
It's quite strange to see very capable people fall for such types, but it happens, I've seen it - and everyone around saw it except the very capable person.
There was a TGIF where prominent Search leaders (highest level of engineer, not management) openly asked Larry why we were being asked to compromise the quality of Google search to grow Google+ when GOogle+ was such a crappy and unpopular product. Larry just sort of lamely asked "can't you all get along" and then shortly afterwards, abdicated to Pichai (whose main skill was mainly to get all the SVPs to stop shivving each other in the quest to grow revenue). It was pretty clear that Vic had somehow convinced Larry through grima-style wormtonguing that social feed was the future for google, and Larry had fallen for it.
The difference being, there was no gandalf to come along and reinvigorate Larry.
Having once been on an engineering team where we all wound up shivving each other's ideas in a quest to, idk, do good work? be alpha? its been a while - when the company hired a manager who was able to stop the shivving, it was like night and day. I can deeply respect that skill!