Your app/game won't be 24h on the play store without the apk popping up on some random site, ready to be downloaded.
I don't see a way to do proper sideloading without opening this avenue. Maybe a mac os style notarization scheme, but apple gets a lot of flack for that too.
That said, I'd choose to have control, even as an app developer. Piracy is a fact of life.
One benefit is that if an app is successful but expensive, it opens up for competitors to undercut by price. With piracy, many users would rather pirate the expensive #1 game than to run the lower cost #1938 game. With such a closed system, users will choose cheaper applications and it will help #1938 to rise to #45.This is very good for indie developers.
Another benefit is for the consumers. When developers overprice their software, and users can pirate - they might. Then the developer blames lack of sales on piracy. However, when piracy is impossible, the developer can't blame piracy and must seek the true cause of poor sales, be it a high price or lack of quality.
There's a lot of coverage already on the negatives with a closed store.
I mean, I've been making Android apps since 2011, and I think that the role of app stores themselves is vastly overrated too. They have their place and they're nice to have, sure, but it's silly that OS vendors are allowed to have their own ones and either demote or outright ban anything that doesn't go through them. The transition to "always-online" was supposed to be more empowering, not more limiting.
"But people would install malware..."
It's okay for new technology to require education before one can make use of it. It's about time we get over it and stop treating users like children.