(1) The cross-platform coding ban is a shot at adobe and has nothing to do with Google. At All. Particularly since the permitted languages would all work for an Android app.
(2) Yes, Cell Phone technology moves quickly. One year ago, the 3GS was as powerful as the Droid, which came out in January. But, since Apple releases one phone per year, it has since been outpaced. In all likelihood, the 4G will offer noticeable tech enhancements when compared to everything else on the market. (Save for the EVO, but that's kind of a different thing altogether).
(3) The Android Market is impressive in some ways, a mess in others. Fragmentation is a severe issue and means that of those 9000 apps, only a portion are likely to work on your phone. In fact, if you read Engadget's review of the Incredible, they noted that there is a persistent problem with the market not showing applications as available, even when they are part of the market and should run on the phone.
Furthermore, the Android marketplace suffers from a lack of profit opportunity. Android users spend a lot less on applications, which drives many of the top developers away. As a result, Android applications tend to be less polished and as a whole, less useful. On the plus side, most applications are free and quite a number are useful.
(4) This is not Apple vs. Microsoft, because all companies have learned their lessons since then. With each iphone sold, Apple makes hardware profit, itunes profit, app profit, and soon, ad profit. Google makes ad and app profit, but as seen above, far less than Apple. The goal here isn't to have the most market share, but the most effective market share.
Android is both a nerd phone and a feature phone OS. Most android users are using things like the Eris or one of the Motoblur or Samsung installs. These aren't the hardcore smartphone users. They may not even know that they run Android, since it is so rarely mentioned in the marketing materials. These people are the low hanging fruit for handset manufacturers, since they sell the handset at a profit and spend next to nothing on software development. At the same time, they do very little on the whole for Google in either the revenue or mindshare battles, because they aren't using the phones the way a typical iphone user does.
Then, you have the business-class user, who is essentially entirely shut out of the android ecosystem.
Finally, you have the nerd user, like us. We buy the apps, view the ads, load music onto the phone, etc, etc. We use the phones to their fullest extent. And for people like us, Android is a good OS, although clearly a step behind Palm and Apple. The thing is, the advantages Android has over those systems are useful and go a long way towards making up for the shortcomings (hideous battery life, poor touchscreen response, lag, glitches, scam apps).
(5) Speaking about hardware is the most foolish means of differentiating phone OSes. That stuff is available to everyone.
In the long run, Android is almost certain to have more marketshare in terms of handsets than the iphone. But, it really won't matter. The iPhone is simply used differently than other phones (look up web-browsing numbers, apps per phone, app usage per day figures) - or just realize that in a week, the iPad has realized the same percentage of all internet traffic as all android phones combined. Long story short, this reminds me a lot of when the iPod was dominant but before the game was clearly over. You had people who got up in arms over iPod killers from iRiver because they had Ogg Vorbis or some shit.
The bottom line is that having both is good for consumers. Without Android, Mobile OSX wouldn't have gotten multitasking or a threaded inbox. Without Apple, Android wouldn't have many of the features that Google realized were important from its involvement in the iPhone development process. And once MS is back in the game, they're going to have people innovating too. But, unrealistically championing an OS...and based on the hardware of a small percentage of the handsets, at that...doesn't make a whole lot of sense.