I think the insane part of Google's original plan was the "no steering wheel" part, not the fact that they wanted to manufacture the cars themselves. There are so many corner cases. I can't imagine that they would get the tech working 100% out of the gate without needing some sort of manual override.
For a little 25MPH mini-car, full automation was and is quite practical. Google could have manufactured those things and put them on campuses, senior communities, and such. About five companies are already making slow-speed autonomous shuttle vehicles, most of which have no manual controls.
