Wouldn't all the cars by any manufacturer have to pass the same very rigorous driving tests in the first place, to be able to be sold in the market?
Even if Google's software was the absolute bees knees, what if Google deprioritized it? Left the industry? Made unreasonable licensing demands, or made exclusivity deals with competitor automotive manufactures? What if they used it as leverage to push manufactures around?
Even if you do decide to work with Google for now, not having a backup plan is just poor strategic planning. Having a backup plan means developing these sort of systems yourself.
If the goal is safety then a wild west with every company setting standards for their own projects isn't going to be the best approach. If the goal is profit then Yee-Haa let the gold rush begin!
Making each car responsible for its own collision avoidance is a lot more robust. If the sensors fail in one car, the others can take corrective action. For maximum safety, you'd also want the cars to be running different (but equally good) software, so you don't run into the type of situation where (e.g.) they all go nuts because the programmer didn't account for leap years or whatever.
You can't seriously expect this to be "just a google thing".