OP here. Lots of people at Google have PhDs. Most do not. My role is actually a Tech Lead Manager, which is far more technical than a typical manager position, and indeed I am on the Software Engineer ladder. I would say about 80% of my time is spent on technical things (writing code, design docs, evaluating designs, etc.) and only about 20% on "manager" activities like doing performance reviews, hiring, and the like. More here: http://matt-welsh.blogspot.com/2013/04/running-software-team...

As far as "wasting education" is concerned, I've blogged extensively about the differences between doing applied research in industry and doing that kind of work in academia or in a more pure research setting, see for example http://matt-welsh.blogspot.com/2010/11/why-im-leaving-harvar...

I find that applying my skills as a systems and networking researcher in an industry setting, where I have the chance to develop and launch real products, is far more satisfying than just writing academic papers. But this is of course not for everyone.