The point is that in order to create a competitive app store the notional competitor would have to create an entire hardware ecosystem to rival Apple. Apple is tying the sale of products together (their phone hardware with the app store software) in order to profit from their app store and they prohibit the app stores of competitors. This is the definition of anti-competitive monopoly[1].

You also write that Apple is dominant because it is good and good because it is locked down. This is an argument that's first impossible to verify and second irrelevant. We can't know if "locking down" and preventing other app stores from existing makes Apple better or worse since we can't look at the counter-factual reality where Apple isn't locked down. My intuition would be that more choices would be better, but again, we can't know. The argument is irrelevant because it's still anti-competitive behavior and illegal regardless of if it makes the product better or not. I might sell more soda if I included a bit of cocaine in every bottle, but I couldn't argue that it was legal to do so because it made the product better. Bundling IE with Windows for free may have made Windows better, and yet...

1 - https://www.ftc.gov/tips-advice/competition-guidance/guide-a...