My theory is Google doesn't want to be too competitive, they mainly want to enable the Android market. If they're too competitive, Samsung, Motorolo, Oppo, etc will change to a different base. Google benefits from Android anyway by its embedded core of Google services.

However, I think with the -a series (7a, etc) they've turned to filling a gap with a reasonably priced high quality device, because Samsung &c low priced handsets are really terrible.