Facebook and Google have the most talented pool of engineers and hackers when it comes to web-based technology. They compete head-on and are known to have delivered killer products that people love to use. However, with this growth, both these tech giants have become wormholes that suck up a bunch of talent every year and at times, focus it on the same tasks. I agree with Eran Hammer-Lahav on this article.
This is true even more for Facebook than it is for Google. Googlers have a number of side projects that allow them their private innovative space. It is a company crawling with innovation and the 20% projects bring enhancements to the existing web technologies every day. Both Google and Facebook contribute to open source technologies as well. Facebook itself contributes actively to the Cassandra database project and Google has a number of projects going on to speed up the web, especially the spdy protocol.
I think Facebook is killing entrepreneurship because all its work is focused on exactly one product lineup when they are capable of more. Absorbing all possible startups (or the workforce behind a possible future startups) under their banners, these companies are nipping possibly new services and products. However, the talent pool is not to blame for this.
Some people have excellent business ideas and no technical knowledge to pursue those ideas while others have sound technical skills but do not want to work on a startup. Many people who join these tech giants lack entrepreneurship but have the technical skills. Out of those many, some gather ideas all throughout their stay, only to venture out on their own after a few years.
In short, an entrepreneur mind never dies. It might wander for a few years and learn along the way, but sooner or later, it will emerge. About innovation, well those who prefer working for these tech giants are innovating nonetheless.