My point is just that Android is something like this:
- A Java-like environment
- On top of a *NIX-like environment
- On top of the linux kernel
And as we all know, Java environments can run on a variety of OSes (*NIX or not).
It doesn't really matter whether a Java application runs on top of linux, OS X, FreeBSD, Solaris, Windows, or whatever other OS. The Java application will work, as long as the Java environment is compatible.
So in the case of Android, most of the lower layers could in theory easily have been implemented with something other than a linux-based environment (heck, a big reason for the popularity of *NIX was/is because you can easily recompile the same software on any *NIX-like OS, because they all support the POSIX and ANSI C APIs. A large part is completely interchangeable by definition). At least, from a technical point-of-view.
Whether or not linux was the best choice for Google from a business point-of-view is not something I can judge properly, nor am interested in. I can only assume that Google looked at various alternative paths, and used sound reasoning to arrive at their choice for linux.
Would they not be as good? Again, I highly doubt it. All Android has done so far is to copy the iPhone. It's much like how most linux/open source applications are merely copies of commercial/closed source applications. They rarely reach a level of maturity where they actually compete with the original applications directly.
I feel the same way about Android. It's a budget iPhone, but not a direct threat to the real thing. I mean, I use an Android phone, but if there was no Android, I wouldn't have gotten an iPhone anyway. I simply don't want to spend that much money on any phone/gadget.
I think the same goes for most people. If they want to spend the money, they'll get the real iPhone anyway. I haven't heard anyone getting an Android phone "because it's cheaper". What I have heard however is people who went from an iPhone to an Android phone, and complaining that it's not as userfriendly, slick and well-supported as their iPhone was, and are likely to go back to an iPhone next time.