The Mac App Store is not a failure from the user side, it's where users would look first. Nobody wants to have to go to different websites/repositories every N days to update all of their apps/drivers, or put up with spam from 10 different update notification mechanisms. I still remember that hell from barely 12 years ago. Why do you think gamers flocked to Steam?
As a developer, it's more of a failure of Apple's dismal documentation; I -want- my product to be a nicely sandboxed, well-behaved citizen that only accesses exactly just what it needs, but the state of macOS API documentation was too grim to learn how to do that the last time I tried (like "security bookmarks" and "file providers" from a relatively-simple Swift app).
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Myself, I would never want to trust anything centralized.
So... major failure? Is that what's in between moderate and massive?
If so, I'd love to have a major failure. :)
How is that different from trusting multiple sources? You'd just be multiplying your concerns. Any of them could slip in some malware.
The only advantage I can think of is censorship resistance, or access to older versions and discontinued products.
The exposure is also not any worse when the people you trust are equally trustworthy. If you install ten apps from one distributor or ten apps from ten distributors and all of the distributors are equally trustworthy, the chance of an app you installed being approved even though it was malware is the same. It may even be lower because the distributors have to worry more about their reputations when there is competition.
And it also applies the other way. Right now they can reject apps that you want not because the apps are malicious but because they compete with the distributor's own. If there were five other trustworthy distributors then you could install it from any of them. So you could always get e-readers that compete with Amazon from Google, search apps that compete with Google from Microsoft, web browsers that compete with Apple from Mozilla and so on, no matter what kind of device you have.
Which applications did they want to install from outside sources? Which sources?
Where does something advertise itself as an iPhone app but not available on the App Store?
Like frogs cooking in water, macOS and Windows users will be eventually realize that all their apps are store based as well.
And for everything else they get Web apps, including AAA games.
The missing authority the user has over it is.
E.g. you can have no wallet gardens but still sandbox every single application (which btw. I would prefer).
Plenty to choose from.
Walled garden only exists because mobile devices make self-install alternatives very difficult or impossible to get on purpose, otherwise they would not be able to compete in any ways.
Case in point, the Mac App Store and the Windows Store are both moderate failures despite a lot of technical & marketing push.