I think for Asian developers, specially in China, fragmentation is a HUGE problem. There are literally hundreds of variations of cheap Android phones out there with different screen sizes, OS versions, etc. We replace our phones regularly here in the US and have access to the latest phones from Samsung, etc. but that is not the case in most parts of Asia.
I don't think it is that simple. In Asia, which is ground zero for non-Google Android devices, fragmentation is certainly a problem, but the absence of fragmentation would have been far worse. Without fragmenting an open-source Android, manufacturers just wouldn't have been able to make and sell the cheap smartphones Asian developers are targeting.
