I think you're highlighting a crucial point, and it probably explains differences in expectations/predictions. I've been assuming since Google bought Motorola Mobility that (a) Google would really take over the cell-phone division (e.g., Larry Page on August 15, 2011, "We will run Motorola as a separate business."), and (b) the Motorola of days past would cease to exist. (Disclaimer: I probably took Page's comment a bit out of context -- I'm putting the emphasis on "run" but Page put it on "separate," i.e., that running MM wouldn't influence Google's business model, Android would stay open, etc.).
Anyway, I really can't say if my assumption was totally ignorant and naive, or on the money, but so far I've looked at quotes like "we have to get the old phones out of the pipeline" to mean that once old inventory was sold off, Google would come in and "do their magic." I'm still (ignorantly?) hopeful that we'll see that transformation, and that if the X doesn't wow us enough, the next generation will certainly do a better job.
On a distantly-related note: it's also been hinted here a few times and I totally agree that Google's long-term vision is to merge cell phones and Glasses -- I'm assuming in 2-3 years the cell phones we carry around will be more like portable CPUs that mostly gather ambient data from multiple sensors, do a bit of local computing, but typically feed the data back into the cloud and then bring the "answers" back, e.g.,
User: Hey Google, do you recognize that red car over there?
GoogleChipPlantedInYourHead: It's a 2009 Ferrari.
User: How much does it cost?
GCPIYH: About $150,000 in good condition.
User: Wow, pretty expensive.
GCPIYH: Would you like to see something less expensive?
User: Naah...I'm kind of hungry. Is there a pizza place nearby?...
-Matt
Yeah ill pass on the Motorola X chip

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