However, I've used a number of android based phones and I still find the Nexus One's interface to be the best and cleanest.
I'd like to see some stronger innovation, but that some subset of the choices suck just provides a solid reason to pick the better option. Even a bad example is an example, in that we all learn what doesn't work, and we can cherry pick the best things from a number of different sources. The wider ecosystem in carrier-customized Android interfaces means finding out faster which featuers ones are not strong.
I'm guessing #2, and they don't merge their (hypothetical) improvements upstream to improve the whole platform.
And that, in essence, is probably the biggest issue I see with Android in its fight against the iPhone.
It's even worse than Mac vs PC as at least Windows (at a given revision) looked and behaved pretty much the same on every machine. The theming was light (especially early on, when there was no support for it) and manufacturers added crap, but didn't replace whole subsystems just because.
I also find that to be an incredibly stupid strategy (but in prisoner's dilemma terms considering all the player are bastards...): the first worry of the players in the mobile phone space should be to drive Apple out of it as fast and as soon as possible, avoid their repeat of the iPod and their conquest of a majority marketshare.
Therefore the long term strategy should be to collaborate and make the common platform as good as possible as soon as possible (on all aspects) in order to push Apple out of the market, using hardware to differentiate themselves, and when Apple is stuck into a small minority box (or entirely driven out) they can go back to bickering among themselves and releasing custom shells and stuff.
On a separate note, I don't know why everyone always casts this as an Android vs iPhone fight. Android doesn't need to "beat" the iPhone, the iPhone isn't (by a loooong shot) the largest player in the smartphone market anyway. (http://gigaom.com/2010/03/18/the-mobile-os-market/) There's plenty of marketshare for both iPhone and Android to take away from RIM and Symbian, not to mention that smartphone market is growing very rapidly as a whole.
As long as the sales of Android phones keep growing anywhere near as rapidly as they have been, Android will be HUGE even if they never take any marketshare away from the iPhone. (http://www.fool.com/investing/high-growth/2010/05/27/deciphe...)
Symbian is being eaten alive right now and fading fast, so that one's happening, and the iPhone (and Android behind it) have decided to shoot for the wider consumer landscape, not for RIM's entrenched "Enterprise" position. They're slowly adding enterprise-targetted features (VPNs and the likes) but that's secondary for now, they're not trying to battle RIM. Yet anyway.
But this is cast as a battle between iOS and Android because they are going head to head in terms of demographics, purpose, abilities, mindshare. The means are different but Google clearly aims Android at the target iOS opened, and it's not like they're shy about it.
Edit: This doesn't really address your complaint since 2 vanilla Android phones isn't really that much different than one, but just wanted make sure the Droid wasn't left out.