The bargaining is between users and developers. Developers have increasingly taken adversarial positions with their users, who have accepted increasingly onerous terms and privacy policies because individual users are not in a good bargaining position. Apple, in contrast, is in a bargaining position to negotiate terms of use
on behalf of its users with developers.
For example, if I purchase a subscription to a language learning app on an iOS device, my ability to seamlessly cancel that subscription has been collectively bargained by Apple (via the terms of service of their payment processing system). That's valuable to me, particularly given the absurd difficulty of canceling subscriptions that are not collectively bargained like gym memberships.
How would Apple impose that same term of use, that subscriptions can be cancelled on device with one click, for a sideloaded app? If they can't do that, developers would offer their app only via sideloading so as to be able to take advantage of that stream of revenue, like gyms. Now there's less competition for language learning apps in the first party app store, and I, a user of that store, suffer.
That's not to say there aren't tradeoffs for that collective bargaining; there are. As you say, we have much less control over iOS devices than we've historically had over our computing devices. Similarly, workers who collectively bargain have much less control over their terms of employment than workers who individually negotiate. But for many workers (and many users), that tradeoff is a good one. Apple is currently the only organization offering it.