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A lot of what's on Google Books is still leftover from the day when they in part tapped into the library system in the US and Canada as well as the system at archive.org to make rare books available to scholars as part of their Google Scholar initiative. That means there's a lot of volunteer page scans and such of rarer or out of print books available through Google Books not available in other places. I imagine that while some of the books are out of print, they're not out of copyright and thus the prices are being set by publishers and/or the copyright holders.
There's been a HUGE legal tangle about all of this stuff for the past couple years, so what we're seeing with some of the pricing may well be a result of that. This said, a lot of what's available through Google Books can be a godsend if you're a researcher working on obscure subjects. When I was writing my Master's thesis, I was able to find several obscure collections of primary documents dating to the early 20th century that were amazing in the context of my work.
So it at least has a few advantages over Amazon.
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