Motorola Webtop 3.0 finally leaked out earlier this week, and while it’s not a surprise, it’s really sad to see. For those of you that aren’t glued to rumor sites, Motorola Mobility’s CEO said long ago that Webtop, the Linux-atop-Android hypervisor, was in for a big change.

Webtop? Okay, I probably have heard of that…

Webtop, today, operates as a complete Linux operating system for modern, powerful Motorola smartphones. It works by taking advantage of the USB/Bluetooth host and HDMI outputs, to turn your Android smartphone into a true Linux PC. It comes complete with stock Linux Firefox, file manager, and even a custom version of Linux Adobe Flash for ARM, enabling your lapdock, HDTV, or desktop setup to enjoy full HD videos from desktop web sites… like Hulu.

However, the platform instantly stagnated. The $300+ Lapdock convertible now sells on outlet sites for around $50 to $75. Why? Because Motorola only allowed you to run the apps that came with the Webtop OS. Unlike Android, sideloading was prohibited, and you basically had to root the entire smartphone to do things that Android openly welcomed — like install the Chrome web browser. Your dreams of playing classic games, run great apps like VLC, and do all the desktop-powerful stuff that smartphones are turning into… is gone.

Neutered New World

Why? Because Webtop 3.0 doesn’t run Linux. Not at all. Instead it is simply a software enabler app that expands the resolution of your Android screen, and then outputs it. Essentially, Webtop has gone, in one version, from having a future that dares to be different, to turning your smartphone into one of those $99 Android netbooks.

I’m not surprised, because from a business perspective, it’s a great idea. First, Motorola Mobility is about to be acquired by Google. Google is already keenly aware that Android may become the default desktop operating system for many in the future.

With Windows 8 blocking even basic tenants of computing, such as downloading apps from web sites… people are frustrated at the jailed nature in which most computers are headed. Apple is leaving some open-ness in OS X Mountain Lion with their Gatekeeper initiative, but the emphasis from both Cupertino and Redmond is clear: We are in control.

Both companies are now centralizing around their app stores, and creating a You’re-Out-Of-Business kill switch. I didn’t come up with that phrase, but it’s my favorite way of describing it. If you anger those companies, they can keep claiming your app breaks some random guideline, and kick you off their app store. With Windows 8’s Metro UI shunning even Internet Explorer to a clumsy, single-window interface, the message is clear: Dump your web site, make an app, and comply.

This is why Larry Page said the freedom of the web was under fire. He wasn’t talking about Facebook… he was talking about the above.

Hence, many tech-savvy people will be willing to make a costly sacrifice, trade native code for free, Java-based code on Android. At least with Android, multiple app stores can peacefully co-exist, as Amazon and Google have shown already. And, your web site can always be your app’s storefront… provided a carrier doesn’t go crazy, and block sideloading ever again.

As such, Webtop spawning the first wave of Android laptops and desktop experiences is a smart play on both Motorola, and Google’s parts. It allows Android 4.0 to really step into the waters of desktop computing, while not making it mandatory for app developers to embrace. Google TV showed Google how painful a misstep in execution can be, even when you launch a product properly.

But, it comes at a huge cost in terms of native code. Ubuntu for Android now serves as the last real grasp at allowing Android devices, in this era, to compete with the likes of OS X and Windows in what native code can do. Let’s face it: Gaming on Android still isn’t on-par, nor is multimedia. Amazing apps like XBMC, which run great on (jailbroken) iOS devices, will have to be completely rewritten for Android.

While it’s great that the Linux kernel and Android’s kernel are much more in parity (since Android boots atop Linux to begin with), the day that native Linux application platforms can thrive inside the Android ecosystem… just got moved, way, way back I’m afraid. And, that will stifle Android’s ability to compete with many cutting-edge platform shifts ahead, for both Windows, and Apple’s iOS/OS X combination.

Microsoft shouldn’t ignore this…

One final thing. Weptop 1.0 and 2.0’s blocking of sideloading should be a siren call to Windows RT. While the Android Market Google Play Store played loose with the rules on approving apps, Apple and Microsoft haven’t been so forgiving. For Apple, it may have cost them the #1 status in the platform race. Microsoft isn’t even in the top three when it comes to tablets. Blocking sideloading, and making app developers/innovators weary of the You’re-Out-Of-Business switch is a sure-fire way to ensure newcomers don’t innovate on Windows Metro, Windows RT, or even Windows 8.