All they want to do is to squash most of the competition . In a long term all of the small players in the ad industry will not survive if they have to fight with ad blocking software AND google.
I suspect that they're more afraid of ad blockers than the competition, although I could be wrong. If users are annoyed by intrusive ads they're more likely to install an ad blocker. If they do that they're likely to block google's less-intrusive ads as well.
This may have been true a couple years ago, but I don't think it's true anymore. The majority of people are annoyed by ads, and all it takes is one friend to tell them to "install this to not see ads" or a nephew to come over for them to have access to an ad blocker. I'd estimate this percentage as closer to 50%.
As long as google is fighting to make the internet better, and the competition is actively trying to make it worse, I'm okay with the competition being squashed.