The land they just gave to Google was going to be used for more buildings. I doubt they were going to build skyscrapers, nor could they with the amount of additional parking space that would be needed. The North Bayshore area isn't really accessible except by highways, and even those are pretty much at capacity - in fact, the city council has approved only a limited amount of office space due to the strain on transportation infrastructure.
Indeed, their plan that the city rejected did include an additional off ramp.
But highways are nonetheless terribly inefficient. One extra lane or off ramp isn't enough to handle all of Google's traffic. They've already widened 101 around Google, rebuilt the whole Shoreline/85/101 interchange area to add more lanes, etc. The bottleneck is the off ramps themselves and the local streets -- they cause traffic to back up onto the freeway and make all lanes congested.
The real solution is to allow more housing to be built close to the campus, and elsewhere in Mountain View, so that more people can walk/bike/take transit. The land use just across 101 is really inefficient right now.
Indeed, there's been discussion about connecting Moffett Blvd to the North Bayshore neighborhood a new bridge over the creek that would connect to La Avenida. And creating a spur of the Light Rail system into the neighborhood as well.
