We all know that launching things into space is very expensive, and lunar landers require a very low dry mass. So it's clear that shrinking the various sensors and controllers on spacecraft down to such microscopic sizes is an important enabler for low-cost missions. Unfortunately, MEMS do not have a lot of spaceflight heritage so the challenge for team in the Google Lunar X PRIZE will be determining which applications onboard the spacecraft can use MEMS with a low enough risk to the overall mission.
The good news is that some government-funded studies are already underway such is this NASA one and this ESA one. Hopefully the results of these studies will be communicated the public and the derived hardware will be available. Even if the MEMS components themselves will have a higher cost than the corresponding existing space-qualified devices, it is likely that the overall mission costs can still be reduced by their lower mass and smaller volume.