So phishers buy domains with a levenshtein distance of 1 or two. It solves one problem, but creates an entire class of users that don't understand what a URL is. Who benefits? Google and search engine providers because now they can manipulate future internet users to believe that search engines are the internet. We've reverted to AOL in 1995.

There is nothing more that can be productively argued about this topic. There will be analogies about how complexity is hidden in various domains (cars, computers) and how beneficial it has been and how users are happy with it. Those arguments are fine and maybe they are being made in good faith, but it doesn't change the underlying future truth:

Marketing will now be changed to reflect Google keywords, not URLs. "www." and ".com" will become meaningless. Google will have put one more level of distance between what the users type in the URL and even what they click in the browser and what is reflected in the address bar.

As a member of the Chrome security team and one of the original instigators for this experiment, yes the whole point is to prevent phishing. The fact is that phishing is one of the most common attack vectors for most people, and the way the URL is currently displayed does very little to protect them. So, we're experimenting with ways of displaying the essential information (origin and TLS state) as clearly as possible, while removing the components that are not security relevant and are currently being abused to trick users.

No one has any intention of diminishing usability or making it hard manipulate URLS. The team working on this is still actively refining things and studying what works and what doesn't. But, phishing is a very big problem, and this change to the omnibox shows real promise in countering the attacks. So, I think we would be remiss in not pursuing the investigation further.