This story has caused a major dust storm, but it's really not all that complicated or even surprising. Acer is a member of the Open Handset Alliance. The OHA prohibits its members from promoting incompatible Android implementations (i.e. that do not comply with the Android compatibility program). Alibaba's Aliyun OS uses the Android runtime, framework, and tools, but isn't compatible, nor did it go through the program. On top of that, the Aliyun OS application store host pirated Android applications, including ones from Google.
Is it surprising, then, that Google has decided to step in? Acer is free to leave the Open Handset Alliance; in fact, there are several companies that are not members of OHA which ship and work with Android forks, the most famous of which is probably Amazon. The Kindle Fire devices all run Android, but it's been modified pretty extensively - something Amazon could not have done had it been a member of the OHA. Not being a member makes it possible for Amazon to do what it does, but at the same time, it won't get any support from Google in doing so.
Alibaba can still benefit from the Android ecosystem and the support it receives from Google and others - but only if they join the OHA. "So if you want to benefit from the Android ecosystem, then make the choice to be compatible," Google's Android boss Andy Rubin writes, "It's easy, free, and we'll even help you out. But if you don't want to be compatible, then don't expect help from OHA members that are all working to support and build a unified Android ecosystem."
Back in April 2011, Rubin said pretty much the same thing, and explained why the OHA and compatibility requirements exist. "If someone wishes to market a device as Android-compatible or include Google applications on the device, we do require the device to conform with some basic compatibility requirements (after all, it would not be realistic to expect Google applications - or any applications for that matter - to operate flawlessly across incompatible devices)," he explained, "Our 'anti-fragmentation' program has been in place since Android 1.0 and remains a priority for us to provide a great user experience for consumers and a consistent platform for developers."
While the jokes about fragmentation are easily made, the fact of the matter is that Android is actually a success story when it comes to compatibility. There's no denying it takes additional effort from developers (compared to, say, iOS), but the fact of the matter is that the Android ecosystem consists of an insane wide variety of devices, but yet, applications compatibility is excellent. This is the case because device flexibility is a core aspect of Android (look at how iOS applications need to be specifically adapted for each new resolution Apple introduces, whereas Android applications are more fluid).
I understand Google and the other OHA members - like Samsung or HTC - want to maintain this compatibility as much as possible, since it's beneficial to their businesses and shared interests. Incompatible Android implementations - ones that promote pirated applications, no less - can only harm Android. If Acer wants to ship incompatible forks, all they need to do is leave the OHA.
Perfectly reasonable, and as such, this is a storm in a teacup.