There is a debate brewing on Ramblings over Google fiber. As in most debates, the "facts" are subjective.
One blog speculates that Google will attach every one of the 155M homes to Google fiber by 2035 because it can. It is an interesting read for 2 things: (1) "Speed drives Usage" = true; and (2) VZ FiOS was down to $1K per home = probably not - and the cost of install for FiOS is huge. The gear - ONT, battery backup, set-top box, broadband router/wireless access device, ATA - plus the tech that is there for at least 8 hours, maybe more.
The two things that Google's Kansas City fiber project does: (1) showcase for what is possible; (2) proof of concept to see if it is viable to do anywhere else. Remember how many cities applied for it?
Google still has to work out this project, but when it does, who knows?
I think the RBOCs could have kept rolling out FTTx - FiOS and U-Verse - if they didn't just want to be cellcos. When you have been a monopoly for 100 years, you don't know what to do about competition - and cable is competition. Cable had the TV content issue fixed first - that's why the RBOCs should have bought DTV/DISH - and stuck to Internet and Voice.
"What are the chances Google Fiber becomes a real offering in over 50 cities 10 years from now?" It all depends. There are real issues with deploying fiber that Google is already experiences - like permitting, negotiating with power companies over poles, qualified labor, and available materials (like fiber and gear). VZ's crews hit many a pipe - water main and gas main - causing problems and added expenses. The reality of actually installing fiber is different from what is on paper. Lawns, sprinklers, sidewalks and driveways interfere. Fences, dogs, irate people. After Google gets these bugs worked out and has a year of data under its belt, it may choose to do it again - or it may just be the only one. Google has built wi-fi networks and other access projects - all pretty much one-offs or experiments. It would have to be widely successful for them to become an ISP.