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Chasing this dragon is exhausting, and seems to be requiring more user-hostile measures that prevent end users from using their device fully.

Can there be a legal frame work where Google and Apple just take your source code and builds it on their farm, and app review is a source-code level review? And Developers that refuse to do these things are just blocked from developing on these platforms?

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I don't believe there is any company willing to leak their closed source production source code to anyone. And even they do, it is highly likely there are some dependency they use did not come with source at first place. That wouldn't work in any means.

Handing over your signing keys, your IP, to a company that cannot even be arsed to review apps properly? What could go wrong?

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