That's a lot of money to pay just for retention of people who are not producing anything of value, consuming many other resources (office space, network, hardware, perks), and deeply committed to a project that supposedly will never benefit their employer.
A rich employer may retain an unproductive employee for a limited amount of time if they expect it to ultimately pay off. It just doesn't make any sense to retain someone indefinitely if they're not going to produce anything of value, and (implicitly) will quit the moment you try to put them on any sort of real-world valuable work. Google is a public company with fiduciary responsibilities to its shareholders and a legally accountable board, it can't just throw tens of millions of dollars away without good reason or explanation.
> You see all these different projects competing against each other (multiple messaging apps are a good example) and you think: why is Google so unfocused?
There are many good reasons to have multiple teams competing against each other, building the same product. Often it will bring a strong drive and pace to all competing projects, as well as cross-pollination, and eventually they often merge to a single deliverable that is better than any of the projects could produce individually.
> what Google basically wants to do is hoard engineers
I'm not sure why all these improbable theories make more sense to you than the plain fact that Android was designed quite a few years ago, has many natural deficiencies, and - like all technologies - will eventually be replaced by a superior successor.
That's exactly what Fuchsia is about. Its existence does not require any elaborate conspiracy theory. On the contrary: given how strategically important the Android market niche is for Google, it would be very surprising if Google was not working on a viable successor. It's as if Sony didn't have a successor for the PS4 in the pipeline, and just expected it to sell forever, with minor patches here and there.