It is a definite possibility. I think they key factor is that if the net revenue generated by advertising and/or other means per motorola/google android device is reasonable in relation to the cost per device then ofcourse there is monies to be had.
That's obviously great when you consider the total number of Android devices out there but Google would have to ramp it up majorly to have enough to subsidise devices.
Not impossible, certainly not if they introduced additional services (particularly paid for ones) but a way off I think.
$5.90 in 2010, increasing to $9.85 in 2012. Estimates from Piper Jaffray but based on things said by Eric Schmidt.
Android is a volume business for Google.
(By comparison each iPhone is worth $100 - $150 a year to Apple).