"Google clearly had the choice of making a cool new OS, or getting a Java license and building on that."
Google didn't need to licence the Java code, it wrote its own implementation from scratch.
The bits it copied - the API header files - could hardly be described as "a cool new OS". Let's leave aside that a programming language and its libraries are not an OS. The header files are at best described as "the definition of how the OS/language should interact with the world", not the implementation of that behaviour.
But all right, let's assume that API definitions are as copyrightable as the code that implements them.
What we're left with is one big confidence trick. You announce to the world that your platform is open and free, and espouse the benefits in great detail:
"Sun has chosen a GPL v2 license ... Open sourcing Java ME should help reduce fragmentation and benefit application developers and service providers. For example, the adoption of a common implementation across handsets will significantly reduce the development, testing, porting, and maintenance costs associated with the creation and deployment of mobile applications over a wide range of mobile handsets." -- Shannon Lynch, Sun's senior director of Mobile & Embedded platforms.
But then due to some legal nonsense which I don't begin to understand, somehow Sun (and hence Oracle) actually retained all rights to using Java on mobile platform. Anybody who took their declaration that Java was open and free was taken for a mug.
And that's the big risk here: it means more anti-open-source FUD from commercial vendors. "You use GPL software? Think you can't be sued? Just look at Google and Java"