Rebecca Ward is the Senior Product Counsel for Google Chrome. When asked about the debacle and the public outcry, she said, "In order to keep things simple for our users, we try to use the same set of legal terms (our Universal Terms of Service) for many of our products. Sometimes, as in the case of Google Chrome, this means that the legal terms for a specific product may include terms that don't apply well to the use of that product. We are working quickly to remove language from Section 11 of the current Google Chrome terms of service. This change will apply retroactively to all users who have downloaded Google Chrome."
Matt Cutts over at Google called the license snafu, "clearly a mistake" and said he should have been "grateful to the people that pointed it out". He apologizes for his initial "strident" reaction in his blog."