I don't know about iCloud, but on Drive there is no way to see those files outside the app, it really limits what you can do as a user.

Not to mention that it likely means that iA's own apps on other platforms can't access those files either. So much for the cloud.

There is. At least on iOS, your google drive files show up in the Files app as well as in the OS file picker. They are just as accessible as locally stored files.

Any app which can open files can open files stored on Google Drive. What apps can't do is open files the app did not create, without the users input, without getting a security audit. Which seems perfectly fine to me.

What is possible on one platform is not necessarily possible on another. The focus of this discussion is on Android.

I charitably assume Android has a file picker. I just don't have a device to verify it with.

It has via SAF, which is the right way on modern Android, but op apparently isn't keen in using it.

ElI5: what is the problem then? Why would I want to give a random app access to all of my files on Google Drive?

I think the main issue is it's just different to how it was before and Google won't be grandfathering in old apps. So you have to rebuild the integrations to use the new APIs which mostly let you do the same thing but it's still not a trivial drop in replacement.