I tend to agree with the trust argument. Google wants people to rely on Web technology and Google products and allowing MITM - or failing to prevent - goes against Google’s interest.

I don’t buy the technical argument at all. Google could terminate the TLS connection at the proxy and communicate with the browser on a proprietary encrypted channel. Chrome could easily show a green padlock item and certificate details as seen by the proxy. The whole thing could be open source and transparent. A minority of users will disable the feature; many will accept it. Corporates can be bought by allowing to opt out for ‘sensitive’ servers.