That is a point I absolutely disagree with. Because as a consumer I want to know without a doubt that the thing I am installing isn't going to break my phone, install spyware or sell my data.
But that's the thing, nobody is forcing you as a consumer to use this, you are yourself a perfect example of why Apple allowing free app installation from external sources won't change a thing with regards to the App Store, you won't leave it, and neither will 99% of users.
And for those that choose to do so, what you're afraid of is actually protected against by the app sandbox. It protects users from apps trying to take any data that isn't in the app itself (e.g. camera roll, calendar, contacts, accessing local network, health data, Bluetooth scanning, WiFi scanning, location, none of these data points are accessible to an app unless the user gives it to the app), so it'll be up to users if they want to give them their data.
How is it fair I have to pay for Bread in the supermarket? I also have to pay the same price for that bread as someone who has 1000x my income. See here how stupid this is? For that 99/year Apple offers you a lot of services that cost them a lot of money.
That's a ridiculous take if I've ever seen one. My point is that Apples model for paying for listing in the App Store is deeply flawed when companies like Spotify rack up
petabytes of network traffic and pay the same for the privilege as I do when I measure my traffic in megabytes. It tells us all we need to know about what the $99/year is for, and it doesn't have anything to do with paying for access to tools and documentation, it's there to make sure vendors on the App Store are serious, which is fine, but we're talking about non-App Store distribution here.
So it won't happen, but it will happen. And that is my issue with this whole argument. IT WILL HAPPEN. And other stores will have less privacy protection. Less protection against malware or spyware. For example the Epic Games Store on Windows used to install Chinese spyware from Tencent. (Who owns 40% of Epic)
Of course there will be distribution of apps outside the App Store, there will be Github release pages for open source projects with .ipa files, there will be internal company file servers with sensitive apps in .ipa files, there will be crappy school projects delivered in the form of .ipa files, and yes, there will be shady actors taking advantage of it, but the iOS sandbox will ensure nothing leaks unless the user has chosen to provide it.
This is about users getting freedom to do what they want with the expensive hardware they have paid for.
If you're still worried, just look at Android where developers
are free to distribute apps on their own, developers still aren't leaving the Play Store there, even though it has more or less the same commission and rules as the App Store.