I too am tempted to make a comparison to the poorly translated 80's video game. I'll resist however. While it has a really stupid name, this web API will end up being a very important part of Google's global information strategy. I agree with Ars Technica that they will use this to be an eBay killer. It is no suprise that eBay is struggling right now, especially since they are having trouble getting into China charging the prices they do. They have an expensive product in Skype with security issues that doesn't really integrate into their core business strategy, and on top of all that they are having financial issues. All of this ends up making eBay a target, not for acqusition, but for complete destruction.
Google base is a categorized repository for whatever. You can put your antique bubblegum wrapper collection in there and then can tag it and search for the wrappers by the text contained on the wax paper. Or, and more importantly you can put the stuff that you want to sell on there and have it come up when someone searches for something related. Obviously, if a buyer wants to pay for your stuff, they will definately use Google's new payment system instead of PayPal. eBay can't even defend itself because it overextended itself buying Skype.
It has been very clear for several months that Google is interested in the Craigslist, eBay business model. It offers an irresistable avenue for advertising. If you are searching for bass guitars, you can find a bass guitar, but on the right you can see ads for new bass guitar amps or other related equipment.
I have been skeptical of the whole web 2.0 thing. I think that users will never really want to mess with code to build mash ups of websites. If someone, and perhaps I will take a stab at this, builds a site that will allow mashups of APIs with drag-n-drop and common language then we might have this user-customizable web. I can see this being one of the first killer apps of Web 2.0. I don't like the name, and I also don't think that because a few people in the coastal regions of America have started doing something it will end up becoming a movement. The reason we still have an America Online is because most people don't know how to use the internet. It will take about ten years before the majority of web surfers are mashing up web-sites and using web 2.0 technologies like the Y!Q you see on this site. Using the Google Base API any number of interesting things can happen. You could use the Google Base API mashed up with Google maps to find where any merchandise, or collectors items are located, and that is just the beginning. Google pulled the Google Base site, one can only thing that this was because there was too much press around it, or that they had too much traffic once it launched. I guess we will have to wait to find out more about what Google intends to do with this new application.