If Chrome was a proper part of Android; it'd lose one of it's primary strengths, namely seamless automatic updating. Android's constrained by the certification process of carriers, and thus can't move nearly as fast as Chrome can on it's own. Seems like a small thing, but attaching the Chrome name to a browser that can't quite match the real thing would drag down desktop Chrome's reputation.
A more cynical attitude could be that Chrome intends to be it's own platform (see Chrome OS), and the Android team doesn't want to wake up one day and end up as nothing more than the gory bits between Chrome and the hardware (as Windows already is is for some people).
Autoupdating is not possible on any mobile OS I'm aware of, for security reasons. What should happen is Google (and Apple and Microsoft, etc.) need to implement autoupdating at the OS level. With user permission, of course.
And I mean true, silent autoupdating. When a developer publishes a new version of the app it should download the package, then apply the update the next time that application is closed.
As for your cynical observation, I doubt there is any conspiratorial reason for this. I think it has more to do with Android operating more or less like an independent startup inside Google. I think the Android browser would be much better if the Chrome team was behind it.
Android apps have an "allow automatic update" checkbox. If the box is checked, and the new version of the application has the same permissions as the old one, the application auto-updates.
There is notification (and AFAICT, no way to turn it off in the Froyo version on the original Moto Droid), but otherwise, jellicle is correct. Just check the box on the Android Market App page to allow autoupdating.
Would be interested to learn what the "security reasons" are that you referenced above; did you mean the underlying OS? I've always felt that by Appifying more of the core Android OS functions, Google could deliver more timely updates because they would be able to avoid many of the carrier restrictions and awful modifications made by manufacturers (e.g. just include the keyboard as an app that gets shipped with the core OS).
[UPDATE:] Can't reply to georgemcbay, but he stated:
> "this can be disabled"
I've had this set in the market app as you described for a while, but still get notifications when an app has autoupdated. Did I miss something?
Froyo added auto-updates that work as jellicle described (you select it as an option per-app from inside the market app and it'll auto-update those apps that publish new versions whose permissions haven't changed).
It is true that by default you still get notifications for each app update, but this can be disabled (go to the settings in the Market app, set the notifications setting to 'Do not notify me').
While technically this isn't quite the same as Chrome because the user has to disable notifications manually (and the notification option isn't a per app option, but rather for all apps), I think the system in place on Android strikes the right balance for a mobile device.
