This is totally ridiculous: build something to throw it away and get job at Google ? Blah. This does not have anything in common neither with business nor with entrepreneurship.
I'd imagine this gives them:
a) far more leverage to choose their projects at Google (if you're entering Google in a conventional way, you aren't even told what projects/team you will be working until your start date: you could interview hoping to work on search, but end up working on internal/IT applications)
b) enough money, so that after their stock vests at Google they'd wouldn't have to work.
You are right, however, that is very different from traditional entrepreneurship or business.