Honestly I don't think it's that cynical - it just makes sense. There are the people who can and will do that stuff - and do it happily - and they would presumably be the easiest to hire as junior devs. Google views it as a stepping stone towards their next product launch, and the programmers see it as a stepping stone to a more enjoyable job.
And then the inventors and entrepreneurs create their own projects, and typically both produce and earn more than they would've at the company.
It kind of works out in everyone's best interest (although I'm sure the Google hiring managers sometimes regret missing out on the guy who invented New Cool Thing, and the guy that invented New Cool Thing is probably still a bit miffed that he couldn't land or get through an interview for a job he/she was clearly qualified for).