That's a false dichotomy.
The ability to side-load apps does not necessarily imply a loss of security. Neither does a lack of ability ensure security.
Apple has various reasons for refusing to host an app in the app store that have nothing to do with security.
It really comes down to the narcissistic nature of an ecosystem... "If I don't want something then nobody should have it"... because making an option like, "allow apps to be installed from outside of the app store" that is completely under user control does NOT affect the person who doesn't want to sideload apps.
YOUR iPhone won't magically become "worse" if Apple gives people the option to sideload apps on THEIR iPhone.
But sideloading does lower the security bar. You're basically sneaking past the lifeguard, and swimming in the pool, or maybe it's you are jumping the fence and swimming outside the roped off area IN THE SAME OCEAN. So whatever is lurking outside of that area is able to 'get you'. And just try blaming it on the lifeguard for your right leg being bitten off. But I'm sure people would react negatively for a nefarious sideload someone experienced.
Light sockets are always around. I just choose not to stick my finger in one. I feel safer, and AM safer because of it. If someone else demands the right to be able to stick their digits into light sockets, that's their deal, and I wish them luck but don't come to me with your story of how bad the experience was. A friend of a friend was chatting with me at a party a decade ago, probably longer, and he was lamenting about how his 'droid' phone had consumed his address book 'again'. He said something along the lines of 'I know you are a tech savvy person, what phone do you use?' and I whipped out my iPhone. He seemed kind of floored that I had an iPhone. 'Oh, you use an iPhone? Why?' Because it works. My previous phone was a 'Windows Phone', and it really sucked. I lost my address book several times, the calendar never seemed to work right, I couldn't send email, or text messages for some reason, and the camera really sucked. Not the iPhone does all that, but the camera sucks too. *shrug* Tradeoffs. It works. He said he was so burned by that early droid his next phone with me an iPhone.
So lowering the bar, and the potential of it being demanded by a court somewhere, is just damned insane. So, should Apple have two different models of the iPhone? An 'Open' and a 'Closed'? What a disaster... I would seriously think of swapping to a 'dumb phone' in that case...
I agree with Apple. No one is holding a gun to your head to choose Apple over a different manufacturer. If you want to be able to run with scissors, go somewhere else. 'Choice' is part of 'freedom'. You can't get filet mignon at McDonald's. If you want that, go somewhere else...