I also don't like how Google makes all this money from advertising and then dumps into their poorly done Google-X projects. That money would be better off spent in the free market it seems.

What is it about Google X that doesn't really lend to either real product development, or even cool tech (of late?). For the amount of money they put into it, I expect a lot more output.

At their core they are still a big company and attract the kinds of people who want to work for a big company. Usually, this at direct odds to people who seek out the startup environment. There are some notable exceptions but the basic premise generally holds true.