I got rid of all of my tile devices a while ago due to privacy concerns. Airtags are a vast improvement, and it's sad that google hasn't shipped an equivalent.
The privacy tradeoffs someone is willing to make will vary person-to-person. For many, Google only using precise location data for Ads and (probably) not shipping it off to random data brokers is a good tradeoff for powering and using the many products they offer - eg. YouTube, Maps, email/calendar, etc. Even for life360, it's very likely more than 50% of their userbase is fine with this given the features Tile and Life360 provide them.
But they don't need to purchase it, they've already got it. I think the idea is they aren't willing to sell it as it's key to their business, and they'd rather not make a little more off selling it and risk their competitors leveraging it.
I didn't mention wanting to use google. I do think it's unfortunate that android users don't have a privacy protecting item tracking solution. Airtags are a wonderful product.