I agree. I don't think Google cares much about the browser market itself. They just want to be able to create really great web apps and they're frustrated by how slow the industry has progressed. Every web company will benefit if Chrome accelerates the pace.
I think they'd be perfectly okay with a version of Chrome they don't control becoming the most popular browser. As long as it continued to advance the state of web apps they will have succeeded.
I believe Microsoft has (mostly intentionally) slowed progress in web browser technology so they have time to figure out what the hell to do. Google is trying to break the stalemate. They're probably the only company powerful enough to have a real chance at forcing Microsoft to get off its ass. Firefox has mostly failed at this.
If they do a good job with Chrome it will be the healthiest thing to happen to the internet in many years.