I agree that it's strategic, but I think Google's motive is to set a minimum standard, a catalyst to make the other service providers fall in line. Ie, don't collude to fatten your profits or Google Fibre is going to overtake you.

I think it's sustainable, if the service companies let their margins get too big then it would be a no-brainer profit making move for Google Fibre to expand and undercut them. If not, no skin off Google's back and the increased access to the internet serves their original goals too.