I think you misunderstood the point.
The scenario of Apple pulling out of EU would not be to "punish EU". It would happen if the result of complying with EU requirements outweighs the benefits of selling in the EU market. Remember that EU requirements have global implications - e.g. Apple can't open access to the 3rd party app stores in the EU only, they would be forced to do that in all markets.
That's true. And most of these "other brands" are going to be Chinese. Which will not be beneficial for EU in the long run.
Also, Apple is one of the most valuable American companies and a major player in US economy. An extortionist EU policy towards Apple would likely trigger a response. Again, I am not referring particularly to this one case.
Personally, I am not a fan of Apple's policies when it comes to hardware. However, I am also not a fan of sideloading apps from unknown sources on devices where I do my financial and health care related transactions. And I don't believe that an average consumer is capable of maintaining good security practices.