That's how they fund Android development. The other alternative is having OEMs pay a small fee per device, which is what they ended up doing in Europe.
Yup, it's an all-or-nothing package. The device maker wants Google Play (only way to sell devices)? They need to include Google Keep and Google Sheets. As far as I know, the only exceptions are Google Chrome and Google Search, both of which you can unbundle in the EU and Russia.
