There could be two exit points from the review process. One would be for apps that don’t want to be on the App Store. They could be cleared as free from malware, egregious behaviour, etc. and allowed to be installed through any independent means.
The higher level would be for apps that should be on the App Store. This means they meet the quality standards that Apple would like.
This would allow Apple to raise the quality bar for the App Store, while allowing indie development. Loading a non-app-store app could come with forced user acceptance flow, where you’re informed the app doesn’t meet Apple’s standards for user experience but has at least been checked for safety.
Independent app ‘stores’ would then be able to exist, and we’d have a compromise.