Sounds kind of shysty to reneg on a deal like that. While there probably weren't many people who bought pre-paid cards, shutting it off and charging extra fees after they bought the card in the first place does not inspire confidence.
And what of this inactivity fee? Does it apply to people who have debit cards through google?
I ask because I work in Guatemala much of the year and obviously no one accepts the service here (or no one that I am aware of anyway). I would consider bothering with it, if it did not charge me and then I could use it when I'm back in the states, but if I were charged then I would just not have it on my phone.
I think the service needs some real work if they are approaching it like this. For example, I use PayPal infrequently 2-3 times a year, but I am never charged an inactivity fee. If I were I would never use PP again. But the company still manages to make money off of me with infrequent purchases. If Google is going to gouge me then I sure as hoot don't want to use their services.
In case people missed it, you can request a refund of any of your unused pre-paid card funds:
"October 17, 2012: Your Google Prepaid Card will disappear from the Wallet app and you won’t be able to spend your balance any longer. Don’t worry, you will be able to request a refund if you have remaining funds by visiting this site."
See the last sentence. They're being quite up-front and positive about this. Using pre-paid cards was the compromise they made in order to target a wide audience before they worked out deals with the various credit card transaction companies. Now that they've established those, it makes little sense to continue an unnecessary service (as you can pay with a debit card).