I do think Google cares about webmasters - but not nearly as much as they care about the average user. There is no way they could do otherwise and be a sane business. Given a choice between pleasing a webmaster and pleasing a big chunk of users, of course they choose the users.
I've noticed many times in the ten plus years of WebmasterWorld how easy it is to become disenchanted. But such a loss of equilibrium undermines the ability to analyze clearly and move on to the next win. Clearly there are always those who are winning at SEO. If anyone has ever been one of the winners, I say they still have what it takes to win again - IF they always remember that it really is up to them.
Many SEOs from the early days were doing things that today would clearly be called "black hat". And as the game evolved, they ALL got burned. There even used to be a saying here that you weren't really an SEO if you didn't have at least one site banned. And today there are many top sites and many strong careers built on a foundation of earlier bans.
The SERPs are changing as I type, and there appears to be an update of some substance in the wind. Google continues to evolve the way that they are picking which sites to offer their users. Whatever Google is doing, the results are always right there for us to see and analyze. So as always, there is a challenge worth our study - and worth maintaining our quality thread here.
So I'm done pontificating. Thanks for obliging me. If you are even reading this thread in the first place, you still have the spark. So let's get out there, be smart, and win ;)
[edited by: tedster at 3:39 am (utc) on Oct 4, 2010]