No, it doesn't. It insists that "Open" retain some reasonable meaning.
The difference in technical competence is what makes this move understandable and in Google's best interests. But that doesn't mean it makes any sense to continue calling the project "Open".
Honeycomb is closed. The reasons are irrelevant to whether "Open" is an acceptable descriptor. Google may one day make Honeycomb "Open". But that too is irrelevant to whether "Open" is an acceptable descriptor today.
That's a legitimate concern, but it could be fixed by not allowing people to use the Android trademark on hardware that Google deemed crappy.
And Google's behavior ignores the spirit of open source, which expects the source to actually be available regardless of whether or not somebody's trademark might look bad.
Good times.