Did they? Last time I checked they only licenced the name to Foxconn who are the real developers of the tablet, Nokia had 0 people working on the tablet.
Except that's not true. Nokia designed the N1 both hardware and software. The N1 was designed by Axel Meyer and his team. In case you're wondering who Axel Meyer is, he's the current Head of Design at Nokia and he was also responsible for the design of the Nokia N9 (and therefore Lumia 800). Many of the team designers that were in charge of the N9 remained at Nokia, actually they didn't move to Microsoft.
Nokia didn't license the name to Foxconn. They contracted Foxconn to build the tablet for them. Which is exactly what Microsoft does with the Xbox One, and Apple with pretty much all their products. Now, Foxconn can only produce those things under a license. Obviously otherwise it would be industrial theft.
But Nokia had a group on the Nokia Technologies division (Nokia's new "D&S" division if you will) led by Sebastian Nystr?m developing the N1, starting on the 26th of April (the day after the deal with MS closed).
The key difference between "old" Nokia and "new" Nokia that people apparently didn't grasp is that "old" Nokia was a phone maker AND manufacturer. That second part: the manufacturing and distribution, is what Nokia no longer does and what Microsoft bought.
So basically, now and going forward, Nokia will join the likes of Apple, Sony, Motorola etc. They design the phones inside and out and then a third party (Foxconn) builds the phones for them.
But so far Sailfish OS has been winning awards at MWC and been called "The Android Alternative" by many media outlets. So perhaps they do have a chance, even then they can start off small (they did sell their whole hardware division after all.) I think Nokia is trying to be unique instead of being part of the endless sea of android devices in which it was proven that there's no profitability unless you're Samsung, or Google.
If anything, Sailfish will end up turned into Nokia's Android "skin". As a separate OS it has very little future. And Nokia will not make the same mistake twice. Going with an OS with no relevance and little development (WP7) already cost them a lot once. Even if they end up buying Jolla (which I believe is a possibility) they won't be further developing Sailfish as a phone OS to compete with Google.
By the way, the scenario on Android isn't really as Samsung-centred as that. Yes, Samsung is the biggest Android OEM but they are seeing profits decreasing while other Android OEMs that have innovated more then them these last few years have seen growth (like LG for example).