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Mine - it moves a little bit, but yours does seem a bit excessive. On the Corolla, it hardly moves, but it does move. I believe that the specs say that 2-3mm movement is typical in the axial (parallel to the axle) direction.
If the bearing is that worn out - you might feel a thumping noise rather than a vibration. I would check out the tire balance (note how much weight is on there now, rule of thumb, anything more than 2oz means either it wasn't balance right or the wheel/tire is seriously messed up.) Or a bad wheel hub (not running true, have them do a runout test on the hub).
There are a few 9th gen Corolla (mechanically similar to the Matrix) that had a nasty, intermittent vibration. Many had their wheels balanced and rebalanced, rotated them all which ways, replaced wheels and tires - turned out it was a hub that was warped.
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2002 Corolla S, 1.8L 1ZZ-FE VVT-i
2003 Matrix XRS, 1.8L 2ZZ-GE, VVTL-i (RIP)
2009 Matrix XRS, 2.4L 2AZ-FE VVT-i
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