I honestly don't get why console makers get a boner at the thought of disallowing third party software.

What do they gain out of this?

With proper security protocols you can sandbox your application well enough that hackers shouldn't be able to get to the OS.

And if they do find an exploit, the vendor can always force an OS upgrade, and prevent downgrades with hardware fuses, with new games requiring the latest OS.

It's not like console vendors aren't doing all this right now.