In principle, YES Google crossed the line, clearly. (Reasons are already espoused in other threads, too tiresome to repeat.) In practice, it probably depends on whether end users perceive a clear change in the performance of their PCs.
If the app isn't visually intrusive and doesn't hork throughput, I would guess most won't care one way or the other. Problem is, if the updater causes problems, the simplest option is to uninstall the software -- and who will reinstall it later?
What ticks me off is that with this choice Google seems to be catering those with a surfeit of bandwidth... I never have enough bandwdith, never; now you want to steal a slice of what little I have for your own purposes? Bad Google, bad, evil Google!
I envision a conversation between two typical users:
"Hey, you seen that new Google Earth? Looks cool."
"Yeah, but if you install it nothing else on your computer will work right."
"Oh, dude... screw that."