I suspect a large portion of Apple’s users value the fact that they can’t break their phone by accidentally installing the wrong app or clicking the wrong button. To them it might not be clear what they’re getting from this no-rules App Store.

I think people using Cydia had a pretty good idea of what they were doing.

Most of them probably did, because it was generally difficult to jailbreak the phone and there wasn't much reason to do so unless you were a hobbyist. App piracy was definitely a thing though, and I bet there were some people who did it because a friend told them they can get free apps, only to end up installing stuff that made the phone very buggy (which was definitely easy to do).

It's easy to say "well that's just their own fault if they installed something bad," but I don't think Apple really cares to argue with their customers over whose fault something technically was. Apple just wants their customers to have phones that are working well.

Jailbreaking used to be as easy as going to a website and clicking "jailbreak".

Yes, there was one family of jailbreaks that worked like that, but you'd still need to hear about that and have some reason to want to do it to your phone, and I suspect a very small portion of iPhone owners did that. It would be a lot worse if Apple were forced to allow anyone to make what are essentially jailbreak app stores like Cydia, then one of the biggest video games ever told all their players to go install that so that the video game company can sell digital items at higher margins.

I'm glad that doesn't work any more. I don't want arbitrary web pages to be able to run code as root on my phone.

I'm glad too. But still, I don't think that has to mean "I can't run code as root on my phone".

Doubtful as few changed the root password.