It's a Les Grossman "scorched earth MFer" policy. They build super-sexy beta products or buy hot startups (Wave, Nexus One, Android Marketplace, Dodgeball) and lure in devs and consumers, then get bored like a cat playing with a half-dead mouse and move onto the next shiny competitor up the block.

Meanwhile, no one wants to go into the space that they take up for fear of getting gently and graciously crushed in marketshare, and no one wants that market after they've left it, for fear that "if Google can't make money on it, we can't either". For example, if it wasn't for FourSquare, location-based social SMS would've been dead after Dodgeball; no VC would've touched it after Google bought it and failed.