Side-loading apps used to require switching the phone to a developer mode which disabled certain security restrictions in Android. They made it so any user could do it, including users without the technical chops to understand the ramifications.
Likewise, rather than having Apple review entitlements and for entitlements to privacy-impacting features like location or the camera be approved by the user at runtime, Google put a screen that asked users without the proper technical knowledge to make an evaluation a decision - either allow things that sound scary, or abort running the app.
The App Store review process is an abstraction that allows normal users to decide they trust the system to limit abuse so that they don't have to learn how to evaluate entitlement policies. Putting roadblocks to side loading apps (as you seem to know, still possible on iOS, but harder) means you don't have third parties convincing users to agree to security changes they don't understand.
This is not an open vs closed argument, since it is theoretically possible to build an open system with such features exposed opt-out with sufficient gymnastics. But that is a lot harder, and there is no financial motivation by Apple (or Google, or Microsoft, or any of the console vendors) for doing so.
