Do you realise the irony of arguing for free market and a walled garden (not a free market)- simultaneously?
You can't have it both ways, pick your poison
Do you think free-markets means corporations also need to run their business operations and products/platforms like a market? Because that's not what that means. (Even if it did ideological purity is dumb)
Inversely governments forcing companies to all operate with the same business model is not on a free market.
The only thing that would prevent a walled garden from operating in a free market is if Apple et al was a monopoly/oligopoly and you had no other choices. I've already said antitrust laws for things like browser choice is one of the better solutions than the one proposed.
If you want to sell an app, you have to deal with rules of App Store or Play Store, or Windows Store. You can't even sell pornographic apps - this is the definition of an unfree market.
Android has those options. Please point me to this great privacy and security conscious competitor to Google Play Store.
I wouldn't call it a market failure, there's plenty of benefits with wall gardens and it's not done solely for profit. BUT there's also drawbacks and places where walls don't make sense.
Not being able to install arbitrary apps from various app stores provides security, UX consistency, and stability of the software. But there's also drawbacks for things like privacy or abusive censorship or copyright policies.
Given the benefits/drawbacks, the best solution is to have options in the marketplace. If you prefer having more control, don't mind sacrificing deep horizontal product integration, or doing the leg work to make it ideal (doesn't need to always 'just work' predictably), etc, then you should have the option to use an OS/device that offers that.
Personally I'd rather see Google make Android more flexible (for ex: making Google Play Services less restrictive) rather than forcing every OS to be like Android.
But I'm not sure how that could be done via restrictive policy without throwing the baby out with the bath water (other than targeting monopolistic behavior like preventing choice in browsers). Otherwise taking a more-freedom approach would be best, maybe by investing in open platforms, investing in public relations campaigns to make people understand why lack of choice is bad or a consumer-friendly 'open platform' label to guide shoppers, incentives like small tax breaks for offering more open platforms, etc.
For Apple, they could offer a stripped down iOS (like a server edition of a desktop) without all of the services and side-loading restrictions, without having to ditch the current approach that people like.