It doesn't have to be that way. In BlackBerry phones, the app access is very granular, e.g. I can choose to run Google Maps but deny the app's access to my location.
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.