@Brewster's Angle Grinder,
That study is pretty ancient now. Nexus 1?!?!
I fear your estimate of 170mW is pessimistic. You have calculated the continuous operation power consumption. Something like "location services" need not log position continuously - it'd serve no purpose.
Looking at the datasheet for the Venus638FLPx-D, it has a fast start of 1 second, and a 10uA sleep mode. Logging position every 5 seconds (which sounds location services friendly) would take 1/5th of 98mW (the power during acquisition), or a mean of 19mW. For continuous tracking (such as would be used in a Sat Nav), it's still only 72mW.
This matches the Canmore GT-730FL that I have, and that quite happily logs GPS once every 5 seconds all day long. It's a pretty small thing, with a pretty small battery.
For a Google Pixel XL with a 3450mAHr battery, it'd take 7.3 days to run down the battery logging once every 5 seconds, and 1.9 days of continuous tracking, ignoring everything else running in the handset. Hungry that GPS chip is not. And that's before considering how else the phone might be learning position by means other than running a GPS receiver. Listening into WiFi networks, which is all location services does with regard to WiFi skyhooking, takes far less power than transmitting on WiFi.
The power is certainly being used up by something other than running a GPS chip.
Location services is only of any use to Google if positional data is uploaded promptly. It's no good calculating where the traffic jams are a few hours after they've developed for display on Google Maps. So it's in Google's interests to upload that data ASAP, which requires an Android mobile's modem to be running quite regularly, taking a chunk of power with it. Things are of course a lot better if the phone is camped on a WiFi network. But still, that 0.5W 3G or 0.1W WiFi needed to convey location data back to Google is where the power goes.
However, if Location Services were simply a way for a phone to know where it is and not a means for Google to get data on where you are, that 0.5W or 0.1W wouldn't be used anything like as much, because the phone wouldn't be constantly phoning home to Google.