I'm not so sure. I think it'd largely have to do with developers' and consumers' reactions. If Android was suddenly ground zero for innovative, high quality apps, due to Apple alienating developers, I don't think Google would choose the same model.

Indeed, you can see Google attempting to attract developers to its ecosystem and away from Apple's in some of their recent developer policy changes (no app review times, etc).

But now we're getting way off topic. :)

Google also knows full well that they don't own their platform the way Apple does - developers would just sell directly and have users sideload, or move to Amazon's app store.

There'll always be someone making an app. You can stop producing good apps, but since most apps are already free w/ ads or are a free addon to an already existing service it probably wouldn't matter for the majority of apps people use :(