The problem is, you open iOS up to other app stores, and then some popular apps decide to list only on some other app store and not on Apple's store. Then customers who bought iPhones, because they like the walled garden ecosystem, are faced with the choice of, "use this new app that everyone is adopting" OR "only use apps on Apple's app store" - they can't stay with just Apple's app store and still keep interacting with everyone else. They get dragged into loading an alternate app store to get access to some new app.
People keep making the same argument as you, that having the option to sideload would have no effect whatsoever on anyone else. That's an incorrect assertion.
who forces the supposedly super risk-averse iPhone user base (a billion people?) to use any app? If iPhone users truly pick iPhones for the supposed added security (quoting Tim: " everybody else can purchase android), then the vast majority of the very same iPhone users would simply opt not to download apps from the then third party stores (or just software developers directly - which is what I would do). Both assumptions can't be correct at the same time. If users go iPhone because of this, then the majority of app developers couldn't exit the AppStore even if side-loading existed because users would choose with their wallets and not go for those apps .... see the logic in that?
Obviously, this isn't the case. I get iPhones for several reasons, the App Store is NOT on that list. I, like many, want it for iOS, it's continuity/conservatism, top notch hardware and build quality and superb long-term support.
However, I feel Apple is treating me like a brainless child. Can't do this, can't do that.
Mac computers: Also love them for similar reasons. Superb hardware, great design and... I really like MacOS over the alternatives. The patronizing is becoming worse, but still an order of magnitude less than on the iPhone. I want that on the iPhone. If I decide to install some software there, it's my choice too!
Why can't it be both?
If Apple saw that focusing on security and privacy would make them more money, I have no problems with that.
I return your question 1:1. Why can't it be both?
If you want the 'added security', pay for Apple's extra security pack... a new service just $9.99 per month? Why only offer locked iPhones? Offer both.... I guarantee, many more would go iPhone then! I would have zero reason for the one or other Android device at home then, Apple, just offer it to me and you make more money

why can't it be both? ;-)
Both Windows and macOS have subpar security and privacy for non-technical users.
I agree to some extent. Windows on MacOs have subpar security for non-technical users IF they decide to mess up the system. Well then. How about offering a 100% obvious SWITCH deep down in the iOS and MacOS settings where you have to type in your root password (or just phone key) and actually read and agree to step foot outside of Apple's locked down garden if toggled - in order to be allowed to install ANYTHING.
Apple doesn't even do that today with their App Store. Many data losses and security breaches from App-Store approved apps and service providers have been reported over the time yet Apple allows people without WARNING to install AppStore apps. Apple is not responsible for securing the servers of other services, they only check if the app code isn't malicious, so they deliver the users that feel secure to app providers with safe apps but "unchecked" servers - not better in any way. So why does Apple allow this and not force App-Store offerings to host every database of their services on Apple servers? Well because they don't offer such servers to commercial Devs. If they did when they started the app-store, they would have limited it like so too. It is not about security, it is about money!
Look, I'm clearly trying to over-emphasise this, but treating everybody like children isn't even the issue here.
If they were serious about security, they would lock down their computers just as much as they do with their phones and tablets. They can't because people wouldn't accept it. They were able to implement this early with the phones and tablets, that's why everybody thought this was the norm, that's the only reason it was accepted. First no apps, then apps under conditions (better than no apps)... so the entire thing grew and grew and most were accepting the terms.
There is a reason why Windows has a built in anti-virus tool and why ransomware happens all the time on Windows, and even macOS, but not really on iOS.
well.. I wouldn't opt against Apple Microsoft and Co to offer a maximum lockdown mode for their computer OSs for the dummies of the world. Sandboxed, virtualised, everything.
Back to your question: "why can't it be both"?
Why do (large) companies lock down their Windows PCs? Because the default security is not good enough when you have users of all kinds of skill levels.
I know why... because of dumb users. I even lock down my own computers in the same way, I'm not using an admin account for ordinary work and browsing. But if I need to do something, I'll sudo whatever needed and enter the password.
Apple states it sells gear towards 'professionals'. iPhone Pro, MacBook Pro, Mac Pro, iMac Pro..... why no 'pro' software modes?
;-)