Building a 150$ great phone would allow them to set a feature/quality floor for the market. If they forced their suppliers so the hardware in these phones is properly supported upstream, targeting new versions of Android should be pretty easy. When Ubuntu launches a new version it doesn't need to go and retrofit it to the thousand different types of laptop out there. The state of Android though is that the GPU/Camera/whatever drivers are binary blobs locked in to a specific kernel version.
[1] https://developer.android.com/about/dashboards/index.html
most people could predict from a mile away that when there's no restrictions on it, the carriers and manufacturers will generally race to the bottom in terms of quality and support. ESPECIALLY when the google name is tangentially attached to something, why would they bother making a good hardware model or updating it regularly? laypeople - who they are targeting - will blame google before they blame a handset maker or carrier.
Now I've got KitKat, and the phone dialer has changed -- I have to hit an extra button to get all my contacts, and I don't like the "premium" spots being automatically populated (there are only 3 large icons, and room for two smaller icons, in the quick-access screen). The most important contact is the one I need right then.
Oh, and I also have to re-agree to the license terms on a number of apps whenever I launch them the first time after an upgrade. And my tethering is no longer working. And the flashlight app that worked fine is now rebooting the phone randomly after it is on for a few seconds. At this point, I'm ready to wipe and re-install the older OS version.