The article cites that this might upset carriers if Google sells the device directly to consumers. I don't think that will be a huge problem. If Google did, there would be no subsidy and people in the US just aren't used to paying $300-$600 for an unlocked device. I think it is more likely that Google would work with carriers to sell the device, even if they sold some devices direct.
Overall, I think this is a good idea. One of the complaints I am starting to see about phones running Android is the market is beginning to fragment. With a dozen hardware makers each putting their own spin on the platform, combined with a myriad of hardware configurations, it is getting difficult for developers to make their software easily work on all of the devices, and that is a recipe for disaster. If Google showed the world their vision of what an Android phone should be like, it could make life easier for developers and users. Competing hardware makers might try even harder to make their devices unique, but once consumers wised up to the fact that many apps may not work on such a device and therefore passed on it, the makers would be more diligent in making sure their phones fit the standard.
Worst case scenario Google's hardware partners left the platform for another. Google has the branding to make it work on their own. Microsoft did the same thing when it came out with the Zune. The previous Windows Media Player and Plays For Sure model did nothing against the iPod. The Zune quickly surpassed other MP3 players and while it still trails far behind the iPod, it is more successful than any previous Microsoft powered player.
Speaking of Microsoft, they too should consider building a Windows Phone, integrated with Zune bits for media. While there are some nice phones out today running Windows Mobile, none are really making a dent against the iPhone. The Windows Phone brand has become so muddled under hardware maker's customizations that many WinMo users have no clue that they actually have a Windows Phone.
In watching this, Google has the benefit of 20/20 hindsight and, if the rumors are true, are heading the problems off early on in Android's life.