Yeah, it's been a few months, but last I heard they'd decided showing the source code of Android let blackhat hackers investigate it for flaws, so they started maintaining a closed source branch of Android that actually goes into phones. I guess the biggest issue is when they release a patch for a flaw on their Nexus phones, there will be a corresponding change to source code, and if you examine that, you can devise a hack for unpatched phones. Given the way it takes some months often for some manufacturers to approve the same patches, there are milllions of unpatched phones out there at that point.
Hopefully they'll still bundle up patches to make it harder to identify which changes apply to which security holes, or just hold them back until the manufacturers have all updated everyone's phone, but either way it means the open source branch of Android is less secure.