google offered to buy Cyanogen.
(http://arstechnica.com/gadgets/2014/10/google-reportedly-tri...)
Also, recall that Cyanogen (the company, not the mod) said that they were going to "put a bullet in Google's head". I bet Google has tried to offer support to them and Cyanogen turned it down.
What you mean by "usable"? Vanilla Android is really usable nowadays (I have a Nexus 6P with Android 7.1.1, non-rooted with locked bootloader since I don't really root nowadays). CyanogenMod nowadays is more important for their support to multiple hardware then the customization from AOSP per see. This is especially true since for those who really want mods, things like Xposed Framework offers much more customization.
"Vanilla Android" (from the AOSP) doesn't pass the Compatibility Test Suite (CTS) nowadays, so according to Google's Android trademark rules shouldn't be called Android. Some of the "Core" apps simply don't work at all.
Don't confuse what Google publish at the AOSP with what they ship on the Nexus/Pixel devices: they're increasingly different, with AOSP increasingly dysfunctional. Heck, the initial release of Android 7 for the 5X/6P at the AOSP wouldn't even compile because it had closed source compile-time dependencies.
I know that AOSP isn't the same Android running in Nexus. However I have an Android tablet that I used to run AOSP (nowadays is running CyanogenMod, probably needs to change it to LineageOS). The core experience is exactly the same once you install GApps (at least the minimum necessary to run Play Store).
And no, I really don't need anything that CM brings (I only switched from AOSP to CM because it was better supported on my tablet, CM actually had a developer while the AOSP guy was simply pulling the changes from the CM developer).
Supporting many devices is a double-edged sword. I feel what Google wanted for their AOSP code is to not support tens of different devices to make the code move fast. Part of what made CM valuable, I feel, was really the changes that made it compatible with so many devices. So CM would have to remain CM for the devices support, not for the features of the ROM.