Android OS is an open source operating system that anyone can use, modify to their own needs, and deploy on whatever they wish; you could make a toaster that runs Android OS if you wish. Most companies like HTC and Motorola have their own little GUI tweaks for it, but you could go as far as making a completely different GUI if you wished.
Why not? It's a pretty stable Linux operating system to begin with. It isn't too restrictive, and while Apple has been very successful with the iPhone, I do think that the lack of variety in their hardware will come back yet again to hit them in the butt.
Not everyone wants a candybar cellphone with one, and only one button on the face of it. Some people want phones with dedicated buttons, or with a real keyboard, or a larger screen, or a smaller screen, or god only knows what.
Why should they be left out in the cold?
HTC, Samsung, and Motorola have managed to make many very compelling phones in the past 5 years, almost all of which still have a removable battery and upgradeable storage. Somehow, the iPhone is similar in size and costs more, but is less upgradeable and by far more delicate. And if that wasn't enough, you can get it on AT&T, or AT&T, or AT&T - in their *@#% home market they only let you pick one carrier when any idiot in England or Canada has their pick. That's not cool.