Mostly they dump bucketloads of money into projects that disappear into blackholes, or morph into other products that are dubiously successful.

As far as talent goes, the Dodgeball founders left, Jaiku founders left, Panoramio, Blogger and Feedburner founders left. That's off the top of my head, there's probably a lot more.

Seems like an expensive and unreliable way to do bulk hires.

I don't entirely disagree, but I think some of the ones you mention weren't talent acquisitions. My guess is that, despite the founders leaving, Google is still happy with its Blogger and Feedburner purchases, and they at least sort of integrate into its larger web of services (and data collection).