Have you ever dealt with a municipal transportation system? A lot of them, especially when you're trying to cross between city and suburbs, suck horribly. Moreover, actually getting them to fix things is akin to talking to a brick wall.
In that context, it was probably easier for Google to take care of its own employees by putting up their own circuits which service areas where Google employees live. The only alternative was for the employees to live in the suburbs, which would give the city fewer taxes (since they're very much above the average salary in their neighborhoods) and wouldn't otherwise solve the transportation problem for anyone else.
I also don't quite grasp "appropriate public space, pay little to no tax and do whatever it wants with no accountability". That's like saying a taxi cab is appropriating public space by stopping by a person to take them in. They used the existing stops system because it was more efficient and DIDN'T require them to actually appropriate public space in the form of adding their own bus stops. The only thing they use is the roads, and I'd rather have a bus than 30 cars. I don't see why giving buses to employees would imply paying more or less taxes. I also don't see where accountability comes into question; if they had drunk drivers or disrespected the law, sure, bring the hammer down. There's been none of that.
Now, they're giving to another, completely unrelated system which they take no benefit from. Is it a PR move? Absolutely. Does that mean we should dismiss it? Hell no. They could've spent the money on lobbying, on disrupting the protests, on advertising against them, on pretty much anything else that would have given them more immediate gains. They chose not to. Good for them, and good for all those students who'll be able to get cheaper bus passes.
That Google hides its profits in a tax haven is tangential. All the big corporations do it. If one of them decided not to, they'd probably get lambasted by their shareholders. It's not illegal, so they'll do it. Close the loophole, simple as that.