If Google wants to "not be evil", they ought to be lobbying Congress to pass an orphaned works bill, rather than making side agreements with organizations that can't directly speak for the actual owners of the copyrights which makes Google the de facto owners/publishers of the works. Once an orphaned works bill gets passed, then Google can safely make available all of the out of print works that are orphaned. I suspect doing that, however, would prevent Google from making available anything after 1963, because anything published after 1963 is clearly still copyrighted.
For me, as a sometime contributor to Project Gutenberg, I'd rather see orphaned works legislation that would simplify my verification that a work is out of copyright, than some deal that allows only Google to make such works available. Maybe some day Google's OCR will be improved to the point where there won't be OCR errors on every page, and they'll go back and rerun the OCR on it all, but it's certainly not there yet. Until then, I'd rather have some competition to Google with people taking the time to actually look it over and fix the errors.