File stream is a Kernel module reimplementing NFS or Samba? Or they are killing standard FS access achieved via Rsync and are trying to position a webapp bundled in chrome its place?
The following (linked from the tool's about page) will provide you with a good idea of the underlying technology: https://support.google.com/drive/answer/1716931. In a nutshell, you're mounting your drives via FUSE to gain a interface and on-demand streaming and the option for offline access. Google has wrapped quite a few niceties around the native file interface (Finder/Explorer), and I imagine that there are more to come (e.g., integration with native indexing/search).