There's not actually much in Play Services. The biggest losses are fused location providers and notification services which you would consider core to the OS. Maps are a loss, but these are very clearly Google branded.

Huawei provides HMS for example, a somewhat close feature wise set of APIs for their phones that are still on Android. They can even shim play services API, the same way microg does. If anything, what would be needed would be a common abstraction library with different backends to not depend directly on play services

The reason amazon and Microsoft gave up is because they had no commitment, and that operating these services is just pure loss.

Yes, the default apps in AOSP suck. Making a proper dialer is a two day job, so is a contacts app. Android's core APIs are good enough, and privileged permissions are only privileged by the manufacturer, and its IPC mechanisms are very well documented. Noone does it because it sucks, it's a thankless job and nobody's going to install your dialer. The very fact that each manufacturer has their own custom software is demonstration of how easy it is.

I think it always comes down to the apps.

Windows phone died because of its lack of apps. Same thing with several other mobile OS's. Ubuntu has a really great OS and UI, but no apps for just basic things renders it useless to even the most basic of users like myself. I don't have games, no banking apps, a few email and Microsoft apps and yet I still couldn't find a way to make it work.

One of the other technical limitations is network. Ubuntu has yet to solve the VoLTE (Voice over LTE) riddle. This is a major sticking point for US consumers.