They don't have many fonts available yet, but if there is something I've learned about Google is that they always think big. Maybe in a couple of days they will announce the buy out of one of the foundries?
To be honest, how many fonts do you need? This is the web, and it is not 1998, when a lot of people would want to use as many fonts on their page as possible. Show some restraint.
More choice doesn't mean more typefaces on a single page.
Even if you use only 3 typefaces on a page, it doesn't mean you don't want access a library of a thousand fonts so you can use the perfect 3-5 typefaces.
More than that - most are too stylized to be used for body copy. You'd be amazed at how many times art directors or clients have forced me to use images for large chunks of copy.
For the most part I agree with you and feel that font-size, letter-spacing and line-height applied to standard fonts is enough for good typography.
Why are you implying that less fonts is a good thing? Just because someone might misuse fonts, that doesn't mean we should force everyone to use just what you think is okay. Magazines use all kinds of fonts and they typically look a hell of a lot better than most websites.
Here's hoping...