Does it only allow one window, or is that just an artificial limitation imposed on the window manager because of the nature of the device? One that you would simply change when adapting it to a computer and adding things like draggable borders and title bars? Chances are the answer is yes. There's no inherent reason that it wouldn't scale or make a solid foundation for the desktop graphics/windowing system.
I'm not sure where this "condemning" part comes from, it certainly doesn't come from me. I have no issue with them reusing technology they've already spend lots of time and money developing. Why would I?
It only has one display. It's a rendering aspect, not a "windowing system." While we've been using that term, it's not accurate. You can only have one app open at a time to view. This is a limitation of not only it being on extremely small hardware display, but also for the fact that it is designed to go on small hardware displays. iPhone, Blackberry, Palm etc. all do things along this line. It's not intended to have multiple displays of apps, even if you can have those processes running at the same time. It's not intended to be a window manager in the same way that metacity, or kwm are.
It would be much easier to add the library support for apps on android to an existing windowing system than it would be to reinvent the wheel. Since they're already using an existing kernel, it tends to follow they would adapt the windowing system for it as well (of which there are many to choose from in linux. Gnome, KDE, XFCE, LXDE etc.) All of which use xorg for their base. While they may create the chrome window manager, it will probably sit on top of xorg just like gnome and kde do.
So unless Google were to explicitly say "we're porting android to an operating system wholesale" (which they have directly said they are not doing) it's a pretty good bet they're not going to use android's display libraries in the way you're describing it.
ETA: The expectation you're condemning this came from this post:
It's worse than just another Linux distribution, because they're using their own windowing system (from Android?) rather than X11, which means it won't even be able to run all the existing Linux applications.
ETA2: Asus made similar claims about a "new" windowing system when they were developing their eeePC. It turned out to be a xandros distro with their own crafted GUI of xorg driven windowing. I don't expect much different here. While they may add the android libs for support in whatever they do, I don't see them completely reinventing the wheel for a linux based netbook OS.
ETA3: As always, I am happy to be shown wrong.