I was inclined to say "yes" but then again, $10M and 15 engineers is peanuts for Google; just the publicity Google being the source of innovation and cool may be worth close to that amount.
I think google is trying to make itself into an organization similar to Bell Labs in its heyday. Bell labs had a lot of research going that was only peripherally important to phones.
"and meanwhile Google has more immediate problems." I think they have more opportunities than problems!
Streetview wouldn't benefit from some self-driven cars?