You're not off base. I think you're right on target. I also think that process sows the seeds of Google's fall, like every other tech company before you.
Look up psychology studies on creativity some time. Creativity and intelligence both benefit from collaboration but unlike intelligence, creativity is not a rapid-fire process. If intelligence measures how quickly you find a solution, creativity measures how many solutions you find over time.
Your hiring process biases towards high intelligence but middling creativity. You then use collaboration as a substitute for creative thinking -- many people, many viewpoints.
Unfortunately, you don't get genuine creativity this way. As often as not you get groupthink instead. Unusually smart groupthink but even so. This shows in Google's products, especially the user interfaces. Many of those UIs have steadily deteriorated over the past half decade. And you've selected for staff who despite their genius are quite literally incapable of reversing the trend.