He said limited beta, as in not making a lot of advertisement and cartoons and whatnot. They tried to make it sound like the best since sliced bread, and when people found flaws and problems the hype died down.
Besides, Google DOES seem to have another meaning of beta than you do. See e.g. Google Earth (beta), Google mail (beta) (which is over 4 years and most definitely in production use through the Google Apps product).