I think the author's biggest failing is that he assumes that just because Google is spending time designing tablets, Google wants to make money selling tablets. He could not be more wrong. The entire Android venture is a defensive play. Google is perfectly happy to pour tens of billions of dollars into Android without seeing any direct revenue from it.

The reason for this is that Google's real core business is still the search advertising. So long as people "google" stuff when they want to find something, Google's future is safe. The walled garden device model is a direct threat to it -- even if the manufacturers never directly block Google, if they make using Bing or whatever easier and more convenient, Google might lose their money press.

So Google makes sure that walled gardens don't win. That's really all they are in for. The Nexus 7 exists because IPad was soundly beating all tablets competitors. All the relevant IP in it has already been distributed to basically everyone who could possibly want it. Google wants it to be cloned.