The goal is "make it possible to create an app with NO programming knowledge".
The ability to create "trivial" apps and then run them on your cell phone can be exciting for many people. I think this will increase the appeal of Android as a consumer device. Of course, a big flood of trivial (tool-created) apps in the Android market may reduce some of that appeal, but overall, this seems like a good move by Google.
It will be interesting to see if more people buy Android phones because they can now create and run their own apps on their phones