Your "honest question" contains several false assumptions, as you well know, Michael. Who do you think you're fooling?
I'm not sure who the "unluckier 90 percent" are, because a) X is much, much smaller than 1% of the company, and b) you're not laying out any other 90%-sized subset of the company with your other comments.
People inside X also have calibration and perf, of course.
Your ongoing ranting about "closed allocation" is more complicated; I think you make (elsewhere) an in-theory-mildly-interesting point, but you hugely overstate the significance. It's true that new googlers get relatively little control over allocation (though often not as little as you claim), but it's well-understood, even by you, that 12 to 24 months of good work at your starting post gets you a lot of flexibility. (Most knowledge workers, at least those past the first blush of youth, accept that a year or two of merely-awesome work are a fine stepping stone; we already know that you disagree and claim to want to change the world immediately, starting today.... how's that approach working for you?) If people don't want to work on something, they don't work on it.
Nearly everyone at Google works on challenging problems (well... I have no idea if the cafeteria staff think their work is challenging, so let's restrict this to engineering, sales, legal, and finance). Everyone at Google is building their careers. Can anyone doubt that?
Some of us are jealous of the people who work in X (I am!), most of us are not (I don't know why), but in what universe does it make sense for the existence of X to make me less happy than the non-existence of it?
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More generally, most people do not believe that they are entitled to dictate their salary AND what they work on. And that goes double for people who don't yet have a proven track record of success.
I can pick what I want to work on, if I'm willing to accept whatever salary comes, including $0. (I've tried that, heh. What a surprise, no one wants to pay me for my opinions about board game design, nor my amateurish programming-language-design skills. I know, I know, I can't believe it either.) Alternately, I can make a great wage, working on something that's pretty awesome, but not exactly what I want to work on. Why would I be angry about that choice? If I want the best of both, obviously I'll have to work on making myself valuable enough that it makes sense for X to hire me.