Even though Google is fumbling this service, it really could launch decentralized social networking services.
They just need a 'phase 1' client that draws better imaginary walls between the 'parts' of the service, to fit most users' current conception of how the internet works.
People aren't 'getting' the idea that an email, a chat and a picture archive are the same thing under the hood. Google, meanwhile, is so proud of the technical possibilities that they won't shut up about that part. And it's confusing the crap out of the users they should be enticing.
Google needs to build that more-traditional-looking client and pitch it as a decentralized Facebook competitor.
My first thought was Wave. My second thought was Wave sucks (in my limited experience). I also like the idea of minimising the use of proprietary protocols. Can you imagine if email were invented today; lots of non-connected email islands.
This is why, despite being too young to actually have experienced them, I miss the days when people who actually had the good of the network in mind hashed out ideas over RFCs before rolling something out. I imagine they would come up with something with some parameters vaguely in that space (though maybe not including tor).
I was thinking something more like encrypted storage in the cloud for pull and offline access to feeds. Realtime updates would happen over a push mechanism. (Otherwise polling would make things expensive.) Everything would be encrypted and in complete control by the "local" segment of the graph.
your browser client gets permission to subscribe to a "friend" and keeps up to date via [something like] rss over [something like] tor.