they did
Google *did* do what it says in that blog post. You can do exactly that stuff and get a full Android 2 source tree which compiles. This is a good thing, not a bad thing.
The murkiness comes in elsewhere. Most of Android is properly open source, under a good license, and you can indeed download the source and do whatever you like with it. The big issue at contention here is that Google retains the power to 'bless' Android devices, notably by access to the Marketplace; anyone can build a device and throw the open Android source code on it, but it won't have access to the Marketplace unless Google approves it, which is a big problem for most mass-market devices. Google uses this process to effectively restrict what you can do with Android; you can do whatever you like with it if you want to go the unofficial route and not have Google support and Marketplace access, but if you want those things, you play by Google's rules.
This is particularly murky because Google is happy to do cross-promotions and so on where there's no distinction drawn; the Marketplace is part of Android. So as far as lots of your potential user base is concerned, if you device doesn't do the Marketplace, it's not real Android...
Google also gives access to development Android source trees ahead of time to hardware partners it approves of. This doesn't violate any open source licenses because it's not distributing binaries without source to anyone, but it's another way to exert some control over the ecosystem; if you go the unofficial route, you can only get the source for already-released versions; there's no way you can have your device ready to release with the new Android version that's coming out the same month. You'll be stuck with the old one.
Really the issue is just that 'open' can mean a lot of different things, even coming from the same person. Android 2.x is legitimately open source, but in many ways it's not what some would consider an open infrastructure.