Because leveraging bundling is illegal, if the bundled item is a monopoly, in both the US [1] and the EU. Further, leveraging their search monopoly in such a way as to juice other products is to the detriment of users: if the product deserves a given space in the search results (where deserves means would rise there without bundling), it should rise there on its own, or there is a better alternative that should have been there instead. Hence user harm.

[1] http://en.wikipedia.org/wiki/United_States_antitrust_law

Would anyone really consider AppEngine successful? I hear so many support horror stories, only one poorly supported open source project to try to move off to without recoding to different APIs, and the price is ridiculous compared to other cloud providers...

At the very least, it's successful for Google, since they appear to be making some money from it.