However, it should be that an app asks for permissions and as a user I can tick or untick each individual permission. I.e. does this or that weather app really need access to my contacts? Nope. So why can't just untick that permission?
Permissions on apps seem to be pretty much broken.
I Know it makes dev's life difficult but the capability does exist since Android 4.3.
This ticking/unticking just recently got much easier with XPrivacy app. It still needs root to install the Xposed framework.
[0] https://github.com/M66B/XPrivacy#xprivacy
[1] https://play.google.com/store/apps/details?id=biz.bokhorst.x...
[2] http://forum.xda-developers.com/showthread.php?t=2320783
Edit: I see Groxx already posted about XPrivacy two hours ago.
Consider potentially lots of:
if session.gps: show_ads(location) else: show_ads(general)
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but for every feature of the application that could be using extended permissions.
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This flashlight app is a bad example, and I'm not saying this is an excuse, but I think this is the rationale that is generally used.
Instead, it thinks it has a GPS, but you've decided to tell it that, for example, its "GPS" will always be e.g. times square or perhaps something a bit more realistic, but not real.
If developers try to coerce you into giving extra permissions, hopefully the average user will be smart about it and just delete the app. At any rate, your solution definitely sounds like throwing the baby out with the bathwater.
I actually just a got a new phone (Nexus 5), and the app is crashing on open right now, I imagine because I'm using KitKat or something like that. But that's besides the point.
Showing where you are in some city or other location is the best feature of it, what use does it even have without your location?
A flashlight app needing to read your contacts is obviously ridiculous, but a map needing your location is rather handy.