"...Google looked... the way they were being sold (exclusive to specific carriers, and used to lock consumers in, just like all prior phones) and felt that it just wasn't doing the job the way they'd planned. Android had a reason for existing, and it was to break the logjam in the mobile industry".
If that was their intention, they failed at it. The Nexus One costs about the same as the iPhone to produce, yet the unlocked version is sold by the the same price that what an unlocked iPhone would be. That means their are getting Apple like obscene margins.
No non-technical user in his sane mind would pay $330 more for an unlocked phone.
What they must do, if it is not obvious enough, is to get Amazon like margins and monetize the rest with a wave of new consumers hungry to look at ads.