Take a pair of cheap headphones and plug them into your computer's microphone port. Hold them near your mouth with a sound recorder program open. You will observe that they record sound.

They are physically the same thing; the only difference is whether sound is being sent to them v.s. received from them. And the amplifier circuit, if one exists.

A hidden microphone sends your conversations and private business communication to some secret corporate location that accidentally reported the presence of the microphone.

This is not what happened. We have no evidence that the microphone was being used, and as much as I distrust Google I don't believe that they were using the microphone.

Now that they've connected a feature up to it, I think you should smash it with an axe.

Google did not accidentally build a microphone,

I never said that they did. I bet they always had plans to use it. I don't think they were using it in the past.

and then accidentally connect it to the wifi card,

This is not how electronics work.

and then accidentally connect it to the coroporate storage device.

… This is not how computers work.

Many technically skilled people were involved and solved numberous technical challenges to make this happen;

What technical challenges? This isn't a hard thing to do, actually.

to use this hidden microphone.

Erm.

I don't think you know what you're talking about.

The problem here is that they included it in the specs without telling people. The problem is not that they used it. If they were using it before, that would be clear from the network traffic.