On September 10 2010, about three years later, Google finally gave in. Chris DiBona wrote a post titled "License Evolution and Hosting Projects on Code.Google.Com". Quick quote:
[..] this new way of doing things is a better fit to our goal of supporting open source software developers. The longer form of the reason why is that we never really liked turning away projects that were under real, compatible licenses like the zlib or other permissive licenses, nor did we really like turning away projects under licenses that serve a truly new function, like the AGPL.Oh, wow, two in a row. Not only AGPL is finally allowed into Google Code, but Google admitted that it serves a function ;-)
Well, to celebrate we should probably consider moving Funambol into Google Code.
It is a sweet day, even if it took so long. Or maybe because of it.