You don't spend $12B on one entity and allow it to play on the same level playing field with everyone else that is currently running and will continue to run your operating system. When you control the hardware AND software of one entity, you don't just sit back and allow it to "compete" with all the other devices that are also running your software. No, you design from the ground up so that your hardware/software combo devices far outperform the software-only entities.
Why continue to develop with the intentions of giving consumers a possible ideal situation where they purchase another manufacturer's device and allow them to get the profits from that when you can make your own devices so streamlined and optimized with the OS and hardware working flawlessly in your own devices to the point where your devices are the only logical Android purchase to make. The number of Android phones out there would be the same, but instead of splitting the profits of all smartphone sales, you get them all to yourself.
You don't spend $12Billion and expect to not do that. $12Million, ok, then you were just purchasing patents. $12Billion? No, you're out to change the game.
I think you under estimate the value of the patent portfolio.
Apple and Microsoft desperately want to stop Android/Google because they see the danger. The acquisition of Motorola Mobility allows for the continued growth of Android and allows for Google's extremely successful and profitable strategy to continue unhampered into the future.
I am sure things will change a bit at Motorola over time, but I think Google would just be happy to have the patent portfolio and have a moderately profitable subsidiary in Motorola Mobility or even strip the patent portfolio and sell what's left of Motorola.
What some are forgetting is that because of it's meteoric growth, Android has fallen under increasing attacks. Lawsuits from Microsoft and Apple were a big problem for companies making Android handsets, and to increase profits Motorola was considering suing other Android phone manufacturers for licensing fees. These things were all likely to cause a slowdown in the proliferation of Android. Google has stepped up to the plate, and IMHO made a very smart move to protect itself and it's partners and done a great service to consumers by helping to allow growth and innovation to occur instead of the stagnation that would be caused by Apple and Microsoft's drain on the smartphone sector by continued lawsuits looking for draconian licensing fees and/or injunctions prohibiting sales of their competitor's products.