I think I’d be more accepting of side loading than full blown 3rd party app stores (of course one will inevitably lead to the other, unless there is a lot of sandboxing going on). Something you need to enable in the settings and jump through some hoops to do. It would open up things for some interesting use cases, but be enough trouble that no developer would do that unless it was absolutely necessary.
Back on the v1 iPhone I installed Cydia and messed with all that. As the platform matured it seemed less and less of a thing. I do agree with you on the AppleTV. Allowing things like Xbox Game Steam, or various other things like that, would put it into a whole new class of device. It could be what OnLive wanted to be, but more.
One thing that I find kind of funny is the first iPhone didn’t have 3rd party apps, as you mention. The answer for them was web apps, which everyone rolled their eyes at. However, here we are 16 years later and frameworks like Electron are essentially just wrapping web apps to run on the desktop. Maybe that web app thing wasn’t totally wrong, but just a little ahead of it’s time. I don’t like Electron apps, but I will say they have made Linux on the desktop a lot more viable for the average user.
I guess I have a lot of mixed opinions on this. I just like my phone to be a tool. A portal into some things while I’m away from a proper computer. I don’t use it as my primary device like so many do these days. It’s my link to the outside world, my life line while away from home, and thanks to all the 2FA stuff, proof of my identity. I just want it to work, be reliable, and stay out of my way. Complicating the App Store threatens that simplicity. I’ve often said that if I was 16 I’d probably love Android, or the idea of 3rd party everything on iOS, as I’d have the time to tinker and no real risk if something breaks. Not being 16, I have different priorities and I like that there is an option in the market that serves those priorities rather well.