How is android falling apart exactly?

I would also add that the majority of those users still on the old cookie dough variants are either still waiting for the updates to be pushed down by there carriers if their devices are deemed worthy of the upgrade. Others may not have chosen to upgrade there devices even if they have the notification flashing on there devices (for what ever reason).

Then there is also the abundant amount of cheap Chinese devices where some are still choosing to package android 1.6 still on the low end devices.

ICS is still a high end OS so many wont even get to see it until they upgrade there phones, which not every one is interested in doing really.

None of which is Googles fault at the moment, however they have also commented on the fragmentation in Android in the past and are actively tryong to address the issue. (see motorola buy out and other stories)