Well the situation with Project Maven is more than what gets sensationalized. It first hit the news about 3 months ago. The software being used is related to the pictures and data that drones collect during reconnaissance. Current that data is process and interpreted by humans. AI would help speed up the process and reduce human error. This, in turn, could save lives for both the military and the innocent if violence is involved.
The software is open sourced that's being used on the project, so the military could've, and probably would've, moved forward with or without Google providing technical support. In my view, governments all around the world do business with the private sector. I see this as no different.
So play the situation the other way, Google decides to yield to employees concerns and abandons the project. With them no longer involved, the government may actually completely bastardize the initial intent and we'd never know anything about it. I see Google's role as more of a shepherd on that project.