If you root your android device, you can install AppOps, which allows you to toggle the individual permissions on every application.
Not to hijack a thread, but: this is is why Apple's iOS is such a compelling case. They make it so easy to control access to the location/microphone/etc. in one tab: Settings -> Privacy -> Location Services
I don't know what Google is thinking, but given the current snooping climate you think they'd err on the side of the customer... but they don't.
(It caused an exception to be thrown whenever an app tried to access something that had been locked down by the user. Legacy apps obviously couldn't catch the exception, so typically the app would just crash.)
There's also the question of whether apps will still behave gracefully when receiving dummy data. Some apps may misbehave in ways such that it's not immediately apparent that the root cause is a permissions issue.
That customer data is valuable for them, so "the more the merrier" ?