And what would be so bad about this exactly? The comparison is oft made with closed stores for gaming consoles; but I don't see why regulating console manufacturers to require side-loading or third-party stores would be such a bad thing. There's no law of the universe which dictates that their business model be per-unit loss-leaders for game revenue splits.
I think making it a required policy (with allowed constraints) would not be harmful to consoles at all.
Requiring third party stores is more difficult, but honestly I don't think most people would need them if you can just sideload.
You're right about the dev mode toggle, which is unfortunate. I'd like to see barriers like that go away, and it wouldn't be appropriate on productivity hardware. I don't have any expert inside information on this but I suspect it's an absolute requirement from game studios that don't want side-loaded apps being used to cheat or exfiltrate content - I think that shouldn't require a hard reboot of the console but maybe it's similar to the situation Riot has arrived at with Valorant where they demand full kernel-level control over your system from boot to determine whether you are trying to cheat at their games or not.
At any rate, while I'd prefer fully open devices, it's also a false choice: strategies like Apple's code signing on MacOS could allow for authenticating binaries for the purposes of detecting piracy/malware, without requiring a monopoly on distribution.
and a good accident. But because it's such a good outcome for society, the society in question _should_ look to create more of this. Like how democracy is a mere accident, but it's a good outcome, and society should work to replicate it and improve it.
If parties under the current system don't stand to benefit, but the over all benefit is greater, then it's a good choice. Apple isn't entitled to own their walled garden - it's not a right. It's their privilege they built, but society can tear it down by decree if tearing it down leads to better outcome for society.
If you outlawed general-purpose computing, a large majority of the people who still wrote code afterwards would be black-hat hackers. If you outlawed car repair, the majority of the people who took apart their cars anyway would be installing illegal, unsafe mods. If you were able to successfully outlaw encryption, such that there were genuine barriers to encrypting a message, then the majority of people who used encryption under the table would be people who were communicating about breaking the law.
The only people who are willing to jump through the significant hoops required to sideload on consoles are people who are either strongly motivated to write their own code and fix their own problems (ie, the almost ideological, morally driven homebrew community) and pirates. But part of the reason that's the case is because more legitimate actors can't enter the space.
There is no modding scene on consoles. There are no 7th graders making Xbox games using kits that they can distribute to their friends. There are no widely popular homebrew kits that almost everyone accepts as improvements over the default experience. There is no competition between distribution channels. There are no custom stores with specialized filters and moderation for niche content.
There are a lot of reasons why we might want to have dedicated, single-purpose hardware that can still be modified by normal people, but calls to say, "show me the community for this, and then I will allow the community to exist" are just backwards. I can't show that the majority of people hacking consoles are just writing mods for Zelda games and releasing custom 3DS themes, because the majority of people are not allowed to do that. It's not surprising that the people who buy specialized vulnerable games or modchips to reflash their expensive hardware at the risk of being permanently banned by the companies who make that hardware -- that the majority of those people are already used to breaking rules, and that many of them then look at piracy and say, "eh, I've already gone this far, what on earth do I have to lose?"
Of course pirates are common among sideloaders, you can have your accounts banned and your legal games taken away if you make a mistake. Who the heck other than most dedicated people are going to take that risk? What is surprising is that there's any homebrew community on these consoles at all -- that even with all of the stupid risks involved, that people are still willing to follow the law and engage with hacked hardware in a legal way that fosters a creative ecosystem of mods and custom software.