They'll keep building ChromeOS to hedge their bets. They can't risk getting shoved out of the OS game in any way.
My take: ChromeOS may actually be better for Google's interests in the long term. However Android's success has resulting in significantly more momentum currently. The release of Chrome on Android might be an effort to move Android more in line with Google's larger goals.
Android is Google's take on the appification model. While there's overlap in that Android has a Chrome browser, I think the distinction is that Android's interaction model means that native apps will be primary method for navigation for the forseeable future since the native Web app model doesn't translate cleanly on a touchscreen device.
The Web is essentially Google's Desktop OS, so it has a vested interest in keeping it alive. ChromeOS is a way of accelerating that process, since the closer it gets to becoming viable alternative to an OS running native apps, the closer the web gets by extension. Creating a standalone OS allows them to frame the problem better than just Chrome browser, since a host OS always has a slight masking effect, even if the observer is aware of it.
http://www.silicon.com/technology/software/2011/02/16/androi...
Because besides the security issue, I don't see any advantage at all for ChromeOS in that scenario. And even so, the convenience of having Chrome in Android most likely trumps whatever security advantage ChromeOS has over Chrome on Android.