the instructions are backwards in a way. VERY CONFUSING. They dont talk about creating a cloud bucket until AFTER the plugins are installed (but not activated). The instructions assume (Wrongly) that wordpress folks instal plugins without activatin gthem immediately and do other steps in between installing and activating. Thats NOT how it works in the real world. In the real world people install and activate almost in the same motion. Its a habit that is hard to break for the instructions.
Anyway, if you install the Google App Engine for WordPress AFTER deployment and BEFORE you created a cloud instance the login with FTP credentials appear when you try to activate the plugin. Again I did it wrong but its a lesson learned and I thought I woul documnet it here in case it happened to someone else.