Yes. Unless you need to run Windows the M1 MacBook Airs are much better than the Intel versions. The GPU on the Air is twice as fast as the Ice Lake MacBook Pro!
Apps outside the appstore work fine for native M1 versions - I just installed the Microsoft Office Beta update from Microsoft directly, no issues.
And no, Apple will not lock down the mac to appstore only. They've confirmed that repeatedly since WWDC. Also, it makes zero sense commercially, as the migration of customers to other platforms (which are just as compelling today price vs. performance) would far, far outweigh any 30% additional app revenue from the remaining and greatly diminished customer base.
Those images are certainly not helping my financial budget...!
I am currently borrowing a friend's MBA (13-inch, early 2015, with 8GB memory), and am very tempted to purchase an M1. Initially, I wanted to get a MBA that would allow me to use Parallels, and a Windows VM. M1 will not allow that. So, I have another plan for that issue.