Google can challenge facebook if they get all their Youtube users to automatically be linked to Google+ but that would mean they are going to have spammy users. I guess they are trying to make something of higher quality than facebook but they have to be careful because if they start policing google+ too much then major contributors (companies who hire thousands of people to make social network accounts in India) will start using something else.
Notice that in the Youtube Cosmic Panda update they are trying to get rid of "friends" and only have subscribers? This is probably the first phase for getting ready for Google/Youtube +
I wonder what will happen if Cosmic Panda does go ahead because millions of people are going to lose their "friends" and Youtube will become like Twitter i.e. FOLLOW ME!
Twitter will always be around because it is not yet like a police state and lots of people enjoy the fact that anyone can do what they want (within reason)