I agree. This is essentially the classic agent problem in government. Government hires contractors or outsources services expecting security, reliability, and performance for the money. But the provider only realizes a profit by providing the least-amount of service for the highest cost they can negotiate. Google may have the best cloud out there but they have more clients than just the government and they will pay more attention to the customer who gives them more money for their services. Of course there will be corners cut in security, reliability, and performance so that Google can squeeze out more profit. Simple economics.
If you need proof, look at how contracting worked in the Iraq war – http://www.pbs.org/wgbh/pages/frontline/shows/warriors/view/
The Cloud is too important for Government 2.0 to entrust to private industry. The government needs its own cloud if only to provide the security and performance that we owe the American public.