Even if you thought Waymo technology was amazing and would be a huge success, there is a non-trivial risk that a self-driving car could kill people and turn into a PR nightmare. Thus it's totally reasonable that Google would want to insulate themselves against that risk considering that they own one of the world's most valuable brands in their search business. Also, it might make sense to have a real privacy wall between Google and a potential fleet of millions of cars outfitted with multiple cameras and sensors. The only way to do that effectively is to have a separate company do it.