Is it what is happening with Android? From what I read it’s not the case, almost every install is done via the play store, sideloading is a power user feature that has almost no impact on the average user security.
I don't think that's true.
Google publishes malware stats on the on-play and off-play ecosystems and the malware rates differ. Famous examples like malicious versions of FortNite make news headlines. Play policies also enforce various security-relevant action like updating to near-recent targetSdkVersions and fixing a variety of automatically detectable security vulns. No such enforcement exists in the broader off-play ecosystem so it will be easier to install an app with trivial security flaws.
Whether this is a justification for banning sideloading completely? That's another question.
But yes, there have been such cases. Epic successfully forced a massive number of Android users to sideload Fortnite to get around Google's policies, and Google wasn't happy and tried to undermine that attempt.