More importantly, did they know they were interviewing specifically for Google Docs and not just Google in general? There's no way to learn the ins and outs of every single thing Google does, especially since so many of the projects end up going nowhere.

Nobody wants to say: I spent 3 months but became the foremost Google Wave expert in the world.

From my personal experience, you don’t get interviewed for or by a specific group for "ordinary" Google positions. As I understand things from the outside (perhaps a Googler can confirm?) a candidate goes through the interview process & if they make it through then they go into an internal pool of potential candidates who are then allocated where they’re most needed. I interviewed for an SRE position, so I could have ended up attached to a whole range of Google projects.

I would imagine the intention is to prevent teams picking people who are "just like them" (or any of the other ways in which project groups can go a bit pathological inside a large company). By carving out the interview process as it’s own separate thing in this way you can prevent individual parts of the company going off the rails.