First off let me say that I'm sure this is easier said than done.
I've noticed that a raw AppGameKit project, no media or code, compiled into an APK is about 8MB. In the APK the 'lib' directory is about 11MB (uncompressed).
Could the compiler be made 'smart' so as to not include features that are not used, to reduce the size? I've seen some rather small APK files, FlappyBird comes in at under 900KB.
If this is unrealistic I understand. It's a trade-off, with the ease of use and execution afforded to the developer by AppGameKit comes a price.