Google uses Google Moderator very frequently. IO questions are filtered with it. The Android team makes public hangouts every week and answer questions filtered by moderator. I've even been in a dart hackaton where the creators of dart would answer questions filtered by moderator.

I don't think I've ever seen a bad question embarrassing the speaker after being filtered by moderator. The closest to that is sometimes the speaker will just skip the question. Since it's much more impersonal, it doesn't feel rude.

It really helps to have someone willing and able to play the heavy. Someone who doesn't care if the questioner gets pissed at him or her.

Many speakers at tech conferences are not really good at the nuances of audience interaction so a moderator who can step in to keep things moving is big plus.

Google uses it to filter the questions asked to Larry and Sergey at TGIF and a lot of teams use it to source questions during team meetings (mine did while I was there).

I wasn't aware of Google Moderator before. My first thought was that it looks interesting and useful for a limited audience. My second thought had me wondering how long it would be before Google killed it.