Ben de Castella has an interesting take on the impact of the aforementioned engineering-centric design philosophy at Google:

While people may not be prepared to shell out for PC software, mobiles are a different story. Mobiles are the ultimate lifestyle accessory and one that consumers are used to paying for, even if indirectly through operators. While design may not be too much of an issue when you’re getting something for free, when you’re shelling out hundreds of dollars it suddenly becomes more important, particularly when it is something that goes everywhere with you.

I don’t think it’s a matter of one or the other. All parts of the team need to value and understand the thought/design/engineering process of the rest of the team in order to come to the best conclusions. Apple seems to indeed embrace both design and engineering, while Google seems to only embrace the latter. This is a legit criticism of the G1 to almost anyone except developers, unsurprisingly.