Google Maps API

I've signed up for my own Google API key. I've spent a few minutes researching the "mash-ups" that are out there and I must say I'm impressed with the added quality that the Google Maps interface gives to even the simplest or dare I say lowliest (see www.gawker.com) of applications. I don't see how ESRI is going to be able to directly compete with this particular portion of the GIS market without somehow offering a vast improvement over the Google Data (I don't see that being an easy feat) or by providing the same sorts of "free" services to the web-mapping realm. Someone will have to pay at sometime, but so long as google is providing so much data and service at no cost I don't see how the ESRI webservices model will survive as it stands. I hate being a naysayer, but I think GIS professionals the world over are beginning to take note of the power that Google is providing at little to no cost to the end user.

This all being said, help me understand what it is in this whole mash of things that I am overlooking or simply don't understand.