Everything in play services is most certainly not Application level. I presume you didn't read the linked article or the other comments here about the APIs that are migrating there.
The article clearly states that new platform APIs are showing up in Google Play services instead of in core Android. The article mentions this as a benefit - 3rd party app developers get access to new APIs quickly and consistently across all Android devices.
The downside is the new APIs are showing up in the closed-source Google Play services, and not in the open source Android project.
The only thing there that is not explicitly tied to Google itself is the new location stuff. The rest is game, maps and Google+. I could totally see an argument that the location stuff (geo-fencing and such) would be more appropriate in AOSP, but that's about it. I'm going to keep my pitchfork holstered until I see a real pattern. Well, probably not even then since I don't see closed-source as a personal affront, but you get my drift.