I think most people considered the spin off into Lucent to be the true end of what Bell Labs was. There hasn't effectively been a Bell Labs since 1997.
The true end of Bell Labs was when Lucent started financing customer purchases. They were carrying dot com bubble debt on their books as if it were a solid asset. When the music stopped they had spent their actual assets to the brink of destruction.
I wasn't suggesting that Hinton or anyone else should go to Bell Labs or PARC these days. I was just pointing out that back in the day, nobody would have been disappointed or considered it selling out for a notable figure to leave academia for one of those corporate research centers. For all that Google may aspire to have that kind of reputation for research, they don't have it, yet. So some doubting is allowable. However, I can't think of any other for-profit employer that seems to be as willing and able as Google to build that kind of legacy.
To the extent that they don't have that kind of credibility (I think I agree with your assessment) whatever the eventual result of Hinton joining the team should say something very strong about whether or not they will. If he finds that he isn't getting what he wants out of it, I think we can expect him to leave. If he ends up staying it is evidence that Google can hold the interest of the sort of people you would expect to find at places like Bell Labs.
The dozen or so Bell Labs alumni working at Google is also evidence that Google can hold the interest of the sort of people you would expect to find at places like Bell Labs. :)
