I honestly think that it was a reaction to update issues. The more of the OS which is updateable by Google, the easier it is to patch these. Additionally, i remember people saying at the time that it made it much easier to incrementally add features to Android between major releases.

I don't really mind about the Google Play Services thing (as it probably benefited people overall), but the contracts with OEM's were always wack, and I'm pretty happy that the EU has (eventually) fined them for this literally textbook anti-EU competition law behaviour.