Can't wait for antitrust regulators to break Apple apart over the next decade, Apple has lost most of my respect over the past few years with these kind of behaviors and the insistence on growing their services instead of focusing on making their platforms better. I'm slowly transitioning back to Windows and Android, they've been fine.
There's absolutely nothing wrong with allowing Microsoft or anyone else to offer steaming apps. The individual game review is BS, the games are already rated by a third party body that MS has to abide to.
Safari doesn't restrict anything and yet I don't see Apple blocking Safari. There is no difference between Xbox streaming on the web app and doing it in a native app that could have better integration.
I hope the US congress has the balls to pass better regulations and give the customers the right to run different stores if they wish to do so. They probably won't do anything.