If the Verizon Droid , why does Google need to enter the handset business?

There may have been a time when a Googlephone made sense, but it was months ago, not now. Google can reconsider if have a chance at finding a market and fail.

Google has lots to do without selling phones

The difference between Apple and everyone else who sells a smartphone is the ecosystem built around the iPod and iPhone. No other vendor comes close to matching it.

Google would be better off concentrating on building music and app stores, modeled after Apple. Those are Apple's no-so-secret weapons and until Google can really compete, there is nothing to stop the iPhone.