Not the OP, but I just launched a Google-owned open-source project that was developed partly during 20% time and partly during my personal time, so I can share some of my reasoning why I would do this.
I was a startup founder before Google. I called the shots on what I'd work on, owned all the code I produced, and worked when and how I wanted to. A large part of my motivation for writing all this code was to learn things; another large part was to produce stuff that would be a positive contribution to the world. Alas, nobody used my stuff (well, almost nobody - we had a userbase measured in the hundreds), and I didn't get paid for it. So it wasn't exactly sustainable.
In my official job duties, I now write software that's seen by over a billion users. In my unofficial job duties, I'm the maintainer of an active open-source project watched by thousands of people which gets a dozen or so patches per week. When testing this open-source library, I had free availability of thousands of machines and a corpus of billions of documents. When developing it, I had the help and mentorship of experienced coworkers, some of whom had help leadership roles in major open-source projects. I get paid a fat salary for this. I do work longer hours, but it hasn't come at the expense of things I really care about. I go out with friends 3-4 times a week. I have a steady girlfriend. I call my mom every week. Most of the time for this has come out of loafing around on Reddit and Hacker News, where you are also giving your time away, for free, to produce something of value for a for-profit corporation.
In pretty much every dimension I care about, this is a win for me. My software reaches more users. I learn more. I get paid more. I meet more interesting people, and have more of a social life. My professional reputation increases more. I get more experience.
It used to bug me that I was giving away my labor "for free" to my employer, who would then profit handsomely for me. But what I realized is that not all labor has equal value. I used to reap all the fruits of my labor, and those fruits were worth virtually nothing. I'm now in a position where my labor has dramatically more leverage, and much of that is because I use the resources of my employer, and they're entitled to take a cut of it for that reason.
When the time comes where I feel I can accomplish more outside of Google than inside it, I'll quit. That was what drew me to them in the first place, the realization that, as an entrepreneur, all the ideas I had would be better executed as features of existing Google products. If that ever reverses and something that I really want to do would be better accomplished as an individual startup, that's what I'll do.