The problem is that if the sideloading avenue exists, what do you do when your bank says "from now on use our sideloaded app instead of the app store version"? Or when whatsapp (or telegram, or whatever) does this.

The App Store is a forcing function for app developers, because it's the only way to reach IOS customers. Without that forcing function, some app developers will circumvent, and if a critical mass does it, then you no longer have the option of opting out.

Apple can presumably make the warnings scary enough to make app developers reluctant to leave, but alternative less restrictive app stores and big-name developers will lobby to have those warnings removed for being deceptive.