Console games survive perfectly fine without any sort of anticheat/etc, maybe that would be bad for PC gaming but games could sustain their player base without anticheat, and matchmaking is neither necessary (lots of multiplayer games just don't use it at all) nor is it particularly expensive to run if that's all you're doing.

Obviously that would be a problem on the PC but games would remain popular and publishers would get paid without either of those things. Games as a whole wouldn't go anywhere. They just make more money this way.