Android brings people into the Google eco-system which is where they make their money. They want people using their services which is why they give Android away for free. They make money on every app, video, music purchase. People who pay for Google Music, etc.
Saying Android doesn't make them money is ridiculous. Are you just looking at the Android division as a single business unit working at a loss or something? You need to look at the bigger picture I think.
It's too bad comment threads are locked after some time on HN. It would be swell to come back to this conversation 2 years down the road.