Already have good answers here, but just to add ---
There are some developer APIs that are only compatible with some specific Google Play Services version / Android OS version / Screen version (as already mentioned in the other answers), and not having these specific components or specs may (sometimes) cause the application to:
- Not start / run.
- Crash / Cause other apps to crash.
Google Play Store itself is helping to avoid any unnecessary bad user experience.
Although most of the APIs are backward compatible, even developers are encouraged to use the most recent version of a specific API they are using.
Android is constantly changing and improving, and the best way to maximize it's benefits is to always be updated as much as possible.