There are quite a few things that worries me about this change:
Will we start to see apps leaving the Apple App Store? If so, that is a downside as you lose the benefit of having the Apple App Store as a trustworthy source, and you lose out on managing all apps in one place.
How will Apple be able to force lazy developers to adopt new security features, system APIs and whatnot? One massive benefit of iOS and iPadOS over Linux, Windows and macOS is that Apple can be very strict with developers before removing their apps from the App Store. This is a huge benefit for users as this often results in developers getting a 2-year warning before their apps have to get updated to comply with new features and APIs. Suppose apps can be served outside the Apple App Store. In that case, there is no longer a way for Apple to enforce much of anything, allowing developers to get lazy as they often are on Windows, where apps still utilise things like .NET Framework v2.5-4 years after they've become deprecated and replaced with newer Windows Desktop Runtimes. I encountered this issue earlier today when a piece of Samsung software required me to add .NET Framework 2.5-3.0 as an optional feature on my Windows 11 desktop for it to be able to install and run. This was a piece of software for a product released in 2023.
There are, of course, benefits to be had as well. Apple has some stupid restrictions for apps on the App Store, like no emulators, pornographic content, etc. They are not allowing third-party browsers to use anything besides WebKit as their rendering engine. But these benefits don't outweigh the downsides if I suddenly have to deal with a Microsoft Store, a Meta Store, an Epic Store, losing all control of various payment methods, subscriptions, etc. This allows developers to become lazy as Apple can no longer force them to adopt new features and APIs; they can remove their apps from the App Store. Then, this will be an overall loss for me.
And, of course, we have the security liability. In this day and age, where so many servers get compromised, allowing for the automatic rollout of compromised application updates left and right, the value of having a single trustworthy source for application control is higher than ever. Apple is not immune to being compromised; harmful updates can certainly sneak through their review process. But it's still far superior compared to having your applications being fed updates from numerous sources.