JJ,
let me see if i can convince you of where i think you are making a mistake in your reasoning.
You say:
It's in Google's best interest to provide you something that is relevant to your search
I think this is generally right.. Or rather, i agree that ONE of their main interests is in providing results that you find more useful than the results from the competing search engines.
If they started returning completely ridiculous results that were clearly all about advertising and no real content, and if their results reallllly became obviously bad, they would be shooting themselves in the foot because people would *eventually* stop using google, despite all of the innate forces of momentum and reputation that help preserve their marketshare.
However, companies are rarely ever so stupid as to leverage their monopolistic or other advantages to this extreme that would obviously drive away customers. Instead, they simply use their incestuous relationships and leverage and marketshare to put their fingers on the scales a little, enough to make a huge profit without scaring away customers.
Consider this hypothetical thought experiment:
Somewhere in google labs the people trying to improve search do a study and find out that academic pages and pages without advertisements are much much more relevant to almost every search than pages with ads. And furthermore, that this is especially true for health issues, mortgage and finance and loan issues. The solution is obvious, penalize the ranking of pages with ads on them. The researchers running the study propose the change to the google search algorithm, and note that this change will make the google results more relevant and useful to people, but will cost google about 100 million dollars a day in ad revenue. Now you tell me what you think the google corporation board of directors, etc. would say about this proposed change? you think they would welcome it with open arms, or you think they would find a way to justify not implementing it? I suggest the answer is hell no they wouldn't implement that change -- not at long as google doesn't have a viable competitor that people would switch to if they didn't.
This is the conflict of interest that happens when you are a company making oodles money when people visit certain sites and not others. And it's even worse when some of those sites that you have an interest in sending people to are sites you own that make you even more money if you drive traffic to them. It's true that google has an incentive to produce "relevant" results, but they also have a very high incentive to promote their own pages and products, and send people to pages with google ads on them. Two incentives that conflict.. otherwise known as a "conflict of interests".