It's pretty clear that Google needs to restructure this event if they want it to continue to have meaning as a developer conference. This sort of waste of people's time, only to have tickets sell out in 30 seconds or whatever ridiculous number is just not valuable.
What would Google have to do to maintain the substance of the conference? Simply promise that there won't be any free toys given away? I missed out on I/O 2011 after having attended in 2009 and 2010 because bad people went simply for the hundreds of dollars worth of free and early-release hardware Google hands out.
I would have paid 300 dollars for the conference regardless of whether Google gave me the latest gadget.