Kind of. This is the reason 2-factor makes me uncomfortable too: instead of having 1 username/1 password, it's actually 1 username/lots of passwords. And the passwords generated are all lowercase alphabetic characters (I assume to make them easier for users who don't/can't copy-paste).
It'd make me a lot more comfortable if I could lock each password down to a specific Google service (for instance: generate an OTP for Pidgin, and enable it only for Google Talk), they were a lot longer, and had special chars + numbers in them.
ASPs are 16 characters. That's 26^16 - 26^15 = 4.19315 * 10^22 (41.9 sextillion!) cominbations. If you aren't confident in the size of that keyspace, I'm not sure what to tell you.
The point about permitting a password to be used for only certain services is absolutely a valid one, though.
It'd make me a lot more comfortable if I could lock each password down to a specific Google service (for instance: generate an OTP for Pidgin, and enable it only for Google Talk), they were a lot longer, and had special chars + numbers in them.