The whole geo location feature is currently quite limiting but has potential to be an absolutely great feature that makes people choose Sketchup over other programs. For now you can only get really, really low res and often useless terrain with quite low res imagery, with Google being the only provider.
Currently the terrain component for a geo located model is locked and feels rather dumb. There isn't much users can do with it. To extend the terrain you need to head into the File menu for the "Add more Imagery" option and manually stitch the terrains together which isn't very easy for a new users.
If users don't succeed in this and want to remove the additional imagery even that can be tricky because the components are locked.
Moving the terrain to fit the building isn't possible either.
Moving the building to fit the terrain means losing saved scenes
(unless you have figured out how to use advanced camera tools and have access to it)
and there's a big risk you forget to select hidden entities such as cutting planes or geometry on invisible layers.
I suggest having "smart" component for the terrain that just does what users want to do and is easy and fun to work with. Scaling this component extends or crops the terrain, rotating it changes the north angle and both rotating and moving it updates the model's geo location coordinates.
I also suggest allowing users to chose where to get both terrain data and imagery from. This could also be changed at any point from the context menu of the smart terrain while keeping the model's position. Additional providers could e.g. be national mapping authorities. I also think the whole terrain and surveying thing is a big part of what Trimble does so it's a bit odd that this hasn't been much improved in SketchUp. Also terrain and site maps loaded from smart files that contains the ge location information.
Of course a lot of this could be limited to Sketchup Pro. I think the basic interface should be available for free so people can learn how it works but high res imagery and support for additional terrain providers could typically be pro only.