Why oh why did google not just help develop firefox rather than
launching another problem on the world of web development i.e.
chrome? 

This puzzled me for a few hours, then I saw that they were truly
evil when you read the T&C's i.e. they own everything you do via
there browser

11. Content licence from you

11.1 You retain copyright and any other rights that
you already hold in Content that you submit, post or display on or
through the Services. By submitting, posting or displaying the
content, you give Google a perpetual, irrevocable, worldwide,
royalty-free and non-exclusive licence to reproduce, adapt, modify,
translate, publish, publicly perform, publicly display and distribute
any Content that you submit, post or display on or through the
Services. This licence is for the sole purpose of enabling Google to
display, distribute and promote the Services and may be revoked for
certain Services as defined in the Additional Terms of those
Services.

Ok so that's extremely bad but my guess is that they will
be forced to remove this within days.

This still does not fully satisfy me though.

I think that
the real reason for the launch of chrome is that they were / are
missing one fundamental piece of data that they need to complete
there data set.

 DIRECT USER INPUT

 I.e. what the user types into the url bar, this is
the biggest piece of data that google don't have up until now. 

This data is infinetly valuable in itself however when combined with
the data they already have about user activity its makes them
horrendously powerful.

When you use Chrome and type something into the url
bar it sends this data to google thus giving them their complete set
of data.

Am I Paranoid?

No, not this time, its the only logical
explanation and one that I am sure will be found to be  true.