Which begs the question

If they are not happy with the code, why are Google allowing the manufacturers to sell it in a compiled form?

You can paint things how you want, but the fact is that source code is either open or closed. Currently, Android Honeycomb is closed source. Whether Google intend to open it later or not is irrelevant.

Google, as a company, are considerably more closed than Apple. At least Apple are honest about how they monitor users. Google aren't.