While there are still a reasonable number of very talented engineers at Labs, having talent is sort of meaningless if you stifle their ability to actually ship (which Walmart at large does very well).

Walmart Labs isn't their main IT/dev division though - aren't they more like what Bell Labs was to AT&T?

This is true. For instance, until recently (I think), Joshua Schachter (@joshu) of del.icio.us fame worked for them.