It's a lot easier to push an app update through the Play store vs. convincing vendors to push out timely OS updates. And Google have been slowly moving non core OS features into updatable apps.
It's arguably a loss to AOSP, but at least in the short term helpful to consumers. I say short-term because the features are no longer open-sourced, which is a shame and a loss in the longer-term.
There's noticable lag when switching keyboards that seem endemic in the model of "multiple app keyboards", whereas a more integrated experience would benefit some
Agreed that the "Play Store" model is better for consumers on phones that don't get updates (been there). I hope they try to pull stuff into the core project as well, though. Kinda sad to see Android becoming what people always thought it would end up (a Google-centric venture)
I think there's still no way to type Japanese in AOSP Android (you have to download a Google keyboard or some third party thing)