Presumably other companies would run app stores and do things like refunds. After all there are already apps where you can buy stuff on your phone not through the app store (Audible, AirBnb, Amazon, etc). Why are apps any different?
And then, how many bad experiences for these types of purchases (or articles about bad experiences) will customers tolerate before they stop trusting in-app or third party purchases? One? A hundred?
Or a real life analogy: every year someone drinks bleach and dies. I'd rather we didn't make bleach completely illegal.
Maybe Apple can do what the Mac does and have some prompts like "hey danger ahead".