I don't think this is a great situation, but it's probably the least bad situation we could end up with.
It's our own fault (collectively anyway) since we let copyright maximalists set the agenda. The issue became what should the owners get from this deal, rather than what society's claim on orphaned works ought to be. Ideally we would have had a law written that allowed some sort of scheme to deal with orphaned works, but instead we end up with a situation that benefits the means to set up the legal charade that's allowed this deal to happen.
It'll be interesting to see what ends up happening in the future. It seems possible that legislation could be created to at least break Google's exclusivity if not take it away entirely.
At least we'll now have access to these works, without Google, they'd likely stay in legal limbo indefinitely.