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.
Google Maps getting more precise telemetry data is actually so useful in improving the navigation experience in tricky intersections, overlapping roads, or low bandwidth areas where GPS signal and service can be spotty. I can speak from experience that friends with Android phones experience less jumpiness in their GPS location, less errors in navigation, and less of that pesky "You've Arrived" notification triggering when still far away from the destination.