Google Scholar scrapes arXiv and coalesces the results with journal updates, i.e. it will show the entry for a new journal article with a clearly visible [PDF on arXiv] link when this is available. Google Scholar also scrapes institutional repos (at universities etc.).
Scholar isn't a 'sexy' thing to work on at Google. I'm surprised it still exists, frankly. Google products that aren't career-builders tend to languish.