The idea behind Divisional Organization is that you'd motivate Services by holding them responsible and measuring success and failure via quantifiable things like turning a profit.

But a lot of what would make Services profitable isn't necessarily good for the rest of Apple: squeezing people harder to upgrade storage space for pay, paywalling popular features like Find My Phone, or selling iCloud for Android might all make Services look better on paper but hurt Apple as a whole.

Your proposed compromise, if anything, might make Services worse -- take it from someone who's been there, there's nothing more demotivating and worse for productivity than being held responsible for the bottom line while not having any authority to do anything that would improve it.

And if you're not going to hold the Division responsible for its financials, there's no benefit to moving it out of Engineering.