If Google keeps telling itself it only hires the very best guitarists, and it turns down someone like Hendrix - because he's "not a team player", or he doesn't know how to tap out 13/18 while improvising an Indian Harikhamboji raga, or for some other inane reason - then it isn't really interested in the best guitarists at all.
It's the difference between an holistic view of talent, and an academic and rather narcissistic insistence on specific limited social signals that are believed to correlate with intelligence.
And this really matters in practical ways. A lot of talented devs will be reading this story and wondering if they really want to work for Google. Negative PR like this is incredibly damaging. Consider the opposite - if Google could say "Yes, the Homebrew guy works for us." How much value do you think that would have had?
Long term, the really smart and inventive people start to stay away. And then you get something that seems to be happening to Google already - declining product quality, a poorer user experience, and diminished reputation. You know - Google's record of hits recently hasn't been that great?
So anyone who thinks Google is fine because it still has thousands of applicants is missing the point. Instead of being the kind of place where Hendrix plays, it's in danger of becoming the kind of place where there are a lot of people with a lot of solid but uncreative technical chops, and no one is making cool and interesting music any more.