Google Reader is one of the latest of Googles discontinued projects. I rely heavily on it every day as a rss hub, but I am not particularly worried about what will happen on july 1st. I am sure that by then there will be good enough alternatives to keep on working pretty much the same as now. In the long run I think the rss world will in fact improve as a result of Google closing Reader.
I, and probably a millions of others, have viewed Google as a sort of internet backbone. Gmail was in beta for years but I always thought of it as a service that would be there, no matter what. The same goes for Google Search, Analytics, AdSense, AdWords, Reader, etc.
The fact that Google has begun closing services have forced me to review my thinking. I realize now that Google and its services isn't more of a backbone than anything else on the internet. Reader isn't the first service they shut down and certainly won't be the last. They, like all companies, must make money and Google reader probably doesn't. Financially it might have been an easy decision.
Does Google realize how closing of some services may affect the view people have of them as a reliable supplier? Hopefully.