One major benefit that Google gets promoting and supporting Blogs (apart from a new revenue stream) is more structured data. Structured data as RSS, LinkBacks,FOAF are raw meat to the carnivorous beast that is Google search engine. Flat web pages are interesting but what you can extract from Blogs is much more interesting.
In the past (cira 1995) I wrote software to scan the web and try to extract meaning - very hard and painful. In a few weeks I was able to do so much more with mapping than was every possible just because of RSS. Just thing what the smart guys at Google are going to do.
It will be some time before the web is completely structured but Google's purchase of Pyra is more about structuring the content and providing more insight.