Of course, Google's service is to advertisers, first and foremost. Users generally do not pay for what they receive from Google. Perhaps Google's paying customers, advertisers, are the ones seeing the improvement in the quality of service as a direct or indirect result of telemetry.
Separately, I'm also a google customer as I run an Ad campaign for a small business (skilled labor), and the dollars spent on search ads are extremely efficient with an incredible ROI. Even with CACs in the 10s of dollars, with the size of the contracts being signed it typically costs much less than .5% of the total.