Currently, talented engineers flock to google to contribute their skills to making the best web browser. My concern for a publicly owned utility is that the top talent won't want to work there.

The way governments fuck up basically anything (with very few exceptions) IT related I would say no. Personal example: my name is Marcello and I had troubles applying for a permit online because names can't contain musical instruments (Cello in this case).

Create a consortium or interested private entities but let's not give such an important piece of technology to governments where meritocracy is non-existent (also based on personal experiences).

You really trust the government to fund a browser without content interference?