If the best person for a job is an MBA, the job hasn't been defined very well. A typical MBA is smart enough to get an MBA, but boring enough to think that "Business" counts as an area of study -- it's about as specific as getting a masters in "Stuff".
What graduate degree is more relevant for a Director of Finance or M&A financial analyst than an MBA? Like any large company, Google has lots of business needs which are most appropriately handled by businesspeople. Just like engineers -- we can learn on the job, but we can also get professional credentials from a university.
And I can't believe I'm having to defend MBAs. I'm a grad student in engineering and I'm somewhat unimpressed with the direction of the MBA program here. But it's a legitimate learning experience if you're trying to be a business administrator at a medium to large company -- like Google.
The first 3 reasons he lists:
1. Chaotic operating environment -- too many experiments without expectations to justify or measurements to validate them...
2. ...which was technically impossible because everyone rolled up into one massive P&L
3. Too many battlefield-promoted 'directors' who hadn't actually managed before... none of whom i'd think of as viable mentors
...Actually seem to be Google's strong points. http://steve-yegge.blogspot.com/2006/09/good-agile-bad-agile_27.html
It's not like Google is letting MBA grads run engineering.