There is nothing to reconcile. Google felt threatened by Facebook, and so quietly making the world a better place is a lower priority than what it perceives as self-defense.
There are many googlers who sincerely support free software, but Google the company is a business that has no particular interest in preserving other businesses or even business models.
Why would anyone expect Google not to eliminate its competitors?
What I believe is that (as you have claimed) Android started as open, and is not any longer, but that many advocates of Android (Google included) continue to assert that it is.
You seem to be trying to wriggle out of this by saying that what people mean by Android today has moved past the 'open beginning' that is all that was ever meant to be open, and that's not Google's fault.
I agree that this isn't Google's fault. But let's speak plainly. Android began as open and that was all that Google intended. Things have changed since then and only a part of Android is open anymore.
This is absolutely disingenuous. Google routinely refers to 'Android activations', and the success of Android in public communications. This use is clearly not confined to carefully referring to the AOSP.
If as you say, Google intended to have 'Android' mean the AOSP at one point, and it has stopped trying for that definition now because it failed to make the distinction to the public, then that only strengthens the point that Google (and you) know that what people think of as 'Android' is not open, and so are knowingly exploiting the ambiguity between 'Android' and the AOSP when you perpetuate that idea.