Google Play Services are not (currently) required for developing and running apps, unless those apps integrate with Google's services, like Google Accounts and Google Maps. Of course nearly every Google App will break if you disable it, since every Google App is proprietary and Google's Play Services is their common framework.
The question is - do third-party apps break if you disable Google Play Services? And the answer is that it depends. If the app needs Google's services then it will stop working. However, making Play Services open-source, at least for the functionality provided right now, wouldn't do any good. Because those services rely on Google's server-side infrastructure, so you're still at their mercy.
The only thing that bothers me is the Wifi-based location tracking. Google collects info about nearby Wifi networks and so the phone is able to give a pretty good estimate of latitude/longitude coordinates, even without turning the GPS on. Turning Google Play Services off means that Wifi-based location tracking stops working. And this is a pain, given that many apps these days (Facebook, Twitter) want to get your current city and so Facebook for example is accessing my GPS every time I open the app, with no way to turn this functionality off and it's consuming my battery and the GPS status notifier is annoying. In case you're wondering I had to turn Wifi-based location tracking because of a bug in the latest Android 4.3, as it is preventing my Nexus 4 to go to sleep, thus draining my battery.
The question is - do third-party apps break if you disable Google Play Services? And the answer is that it depends. If the app needs Google's services then it will stop working. However, making Play Services open-source, at least for the functionality provided right now, wouldn't do any good. Because those services rely on Google's server-side infrastructure, so you're still at their mercy.
The only thing that bothers me is the Wifi-based location tracking. Google collects info about nearby Wifi networks and so the phone is able to give a pretty good estimate of latitude/longitude coordinates, even without turning the GPS on. Turning Google Play Services off means that Wifi-based location tracking stops working. And this is a pain, given that many apps these days (Facebook, Twitter) want to get your current city and so Facebook for example is accessing my GPS every time I open the app, with no way to turn this functionality off and it's consuming my battery and the GPS status notifier is annoying. In case you're wondering I had to turn Wifi-based location tracking because of a bug in the latest Android 4.3, as it is preventing my Nexus 4 to go to sleep, thus draining my battery.