But in practice, there are apps we need to use—people who we mostly communicate with over Facebook, movies we want to want that are only on Netflix, etc. In the status quo, we can use those apps, and they're beholden to Apple's guidelines, hopefully reducing the privacy, etc abuses. I can use Facebook and still have some amount of privacy.
In the world where alternate stores exist, I have to choose between using Facebook or having some amount of privacy. Sure, I could not use Facebook, but I'm a real human living in the real world, and that means I miss out on social opportunities that I would rather not miss out on. I—and the vast majority of iOS users, who aren't particularly interested in 3rd party stores—lose a less-terrible Facebook app.
(Not that I'm too happy with Apple here either. Some of Apple's policies are bizarre and abusive, and there are apps I'd like to run that aren't allowed. But I'm not entirely sure it's worth the tradeoff.)
What you don't get regardless is an apple that "throws its weight around" to force competitors and the like to do what apple wants. That's abuse and bad for everyone. That you happen to like it doesn't make it legal