This relies on a lot of assumptions:
1. It is highly dependent on the mechanics of how Apple implements side-loading (again, if it has a scary warning or requires you to turn something on deep in Settings, it's unclear if this would actually be the case). Especially considering that for many apps Apple now has their own versions, so it might not be a great idea for Google to put more hoops to jump through to get to Maps when Apple ships a (now) fairly competent Maps app built in.
2. It also disregards the other benefits the AppStore could provide aside from being the only game in town, as it does now. Again, there are many features that make a lot of sense to be tied to AppStore accounts, the most obvious of which is anything having to do with ease of payments. You might be leaving a lot of money on the table by completely abandoning the "one tap" payments that AppStore payments gets you (especially with in-app purchases, etc.). Separately, users will expect Family Sharing to "just work", etc. Again -- this aligns incentives really well on both sides: a lot of these features are implemented fairly poorly today by Apple because there's no rush, its not like there's another option. With a good incentive to make Family Sharing shine with respect to the competition, it could start being far less confusing and be far more flexible too. It might not take 5 year stretches to get bottom-of-the-barrel basic features like paid app updates or app trials, etc.
3. This actually flips a lot of current economics of the app store on its head: it is an open secret that Apple grants sweetheart deals to big companies on the AppStore who don't pay 30%. This is the worst of both worlds: the big players are given an unfair advantage on the AppStore. However, if they were attracted by their greed to try to "do it on their own" outside the AppStore, then small startups have a real shot at going head to head by being the "AppStore-compliant" version of the app, since 30% is an easier pill to swallow when its not billions of dollars in revenue.
4. The idea that because one or two apps convince users to side-load means that it would open the flood gates to every single scam app doing it is a fairly BIG slippery slope to... slide down? Again, if the process is fairly onerous for each side-load, then you might find that ONLY big names can actually convince people to do it, or important apps like HKMap.live or other apps that nations try to use the bottleneck of the AppStore to prevent. As mentioned elsewhere in these comments -- side-loading wouldn't necessarily mean you don't have to jump through some other Apple hoops.
And most importantly, I would argue that the current situation is worse. Apple tells everyone the AppStore is safe, and thus every app that appears on the AppStore is "Apple approved" (LITERALLY!). This precisely lulls people into installing scammy apps. Apple can't pop up a disclaimer every time you download something from the AppStore saying "HEY NOW CAREFUL, THIS APP MAY BE A SCAM," because it would go against the entire marketing of the AppStore. But they CAN put such a disclaimer in front of every side-load, because they owe those apps nothing and it hurts Apple's reputation none at all in that case.