From a level headed standpoint I think it makes sense for Apple to design something like this. I use it on my Droid and it has rendered my Garmin useless. Motorola offers a GPS like window attachment, which im sure that will be available from Apple that is very handy. It's a smart move and a great tool if done right
This story has nothing to do with what you mention. Apple can already build what you mention using Google's map data.
This is simply about replacing the provider of maps and the locations databases behind it. This has nothing to do with Maps.app, which is a barely functionning mess of basic functionality on iOS compared to what the competition has to offer.
The efforts Apple is putting towards this back-end infrastructure would be best spent on making the front-end application better. If only Apple didn't operate in a "small business" mode where they have small teams that do many different projects depending on priorities rather than more teams working on more stuff at the same time.
That really is not a good comparison. You don't just build out a Maps/Places database like you write software.
It's also not a very good comparison in the fact that Safari wasn't built from the ground-up by Apple. They basically took years of work done by the KDE Community, forked it, promised to give it back (according to the terms of the GPL), went underground, showed back up a few months later with an uintegratable mess, basically screwing the original developers out of the improvements they made.