Absolutely. I think they can do more. The Challenge was relatively (mostly because there wasn't much else) significant 10 years ago and had relatively small ($1m for the winner, per year) attached to them. Not quite the effort we'd expect in relation to the size of the automotive industry, or the damage of externalities of driving that could largely be solved or improved (loss of life, injury, congestion, fuel efficiency, cost of transportation etc). I'm also not aware they continued after 2007.

Of course I wouldn't be surprised in the least if all those university teams (e.g. Carnegie Mellon who came in first, or MIT who came in 4th) are either employed at e.g. Google or Apple working on these things right now, or provided or are providing the research to those who are.

edit: yeah Google's driverless car project is headed by the Stanford director whose team won the 2005 DARPA challenge.