This piece of news is not a surprising as people think, or at least it shouldn't be. Google is much better off showing the major releases at Google I/O than at a random event in fall. Just look at what happened last fall - the whole presentation, which was all of a sudden done in Hong Kong, was pretty terrible. The huge pixellated screen behind the speaker, the low quality video, only 30 minutes of presenting Android 4.0.What would've been a great launch of Android 4.0 ended up not as impressive as it should've been.
On the other hand, at Google I/O they have 2 or 3 days to talk to thousands of developers there, and developers get to ask Google indepth questions not only about Android, but also about ChromeOS, which brings us to this other part of the news - that Android 5.0 will dual-boot with Chrome OS. In fact, it will do much more than that - you'll be able to switch between ChromeOS and Android immediately, without having to reboot.
Personally, I would've expected Google to try to make Android 5.0 more suited for the laptop form factors, which they already sort of did with Android 3.0 and 4.0, and it seems they will try to improve that experience as well, and change the tablet UI to accommodate even more that form factor. But they will also let you switch between Android and ChromeOS. That's interesting, but the question still remains - why can't they just merge ChromeOS and Android 5.0, and make Android browsing extremely secure?
Rumors say that they will "dual-boot", implying that there are still 2 different OS's, but perhaps that's not true at all, and the rumor is misunderstood. Perhaps, Google really embedded ChromeOS in Android 5.0, it's just that when you browse on Android and on the PC, it looks a lot like ChromeOS, and it gives you the same security as ChromeOS.
It's all a little confusing right now, but either way Google made a very good decision to start releasing major versions of Android at Google I/O event, and also to try to revamp the UI once again to fight off Windows 8 launch. My only hope is that they will launch it on a Transformer-like device with a dual core Cortex A15 processor.