There's a very valid point you didn't address, which is that Google is relying on its search monopoly profits to pump a free product into a new market in order to destroy existing competitors there. Regardless of how you feel about Google or Android, that is a behavior Microsoft was once criticized for when it made Internet Explorer free in order to destroy Netscape. Just something to think about.
It's important to maintain an objective perspective on all mega-corporations with monopoly power to make sure that your emotions aren't preventing you from recognizing a villain. Is Google a villain? In my opinion, they're on their way based on their behavior of the last couple of years.