Android had plenty tools in the past to allow that. Xprivacy even used to allow you to select which Contacts you want to allow for which app. So you could use WhatsApp but only allow a handful of contacts to be read.

One of the frustrations people have with Google is that they're making it increasingly closed and problematic to make modifications. Given that nowadays some banks for example are mobile only and everyone is waiting for Google to completely shut down modified boot systems(probably in response to Qualcomm TrustZone being untrustworthy), people are re evaluating whether it makes sense to invest in the Android ecosystem.

EDIT: google could have capitalized on this and made it a part of their offering.