There are apps that need full access to your photo gallery to be really useful (i.e. where limited pool of photos may have little sense in those contexts), photo deduplication apps being a case on point. At least that piece of information gives the app a chance to tell the user that it may not work as expected.

Now, if an app misbehaves based on photo sharing permissions (i.e. Google Photos not being able to work), that is a decision that the product team took. They're the ones responsible and that should be judged.

If anything there should be tighter controls during the app review process on how those apps use that info and avoid the ones that only work when sharing the full gallery.

The newer API that pops up a system control that lets you select a photo (or more) and only then if you select one, it returns that picture (only) to the application, that API does not need permission, because unless you select a photo, the app does not have access to anything.