Nobody wants a third party store on Apples store they just want the option to install software from other stores on the hardware that they paid Apple for.
Hey, this looks like fun. Apple's 'property boundary' in this metaphor is iOS, not the App Store. It'll probably void your warranty, but I'm pretty sure you can install a version of Android on your iPhone. So you
can install software from other stores on hardware you've paid Apple for.
Of course, that isn't what you want. What you want is to
have your cake and eat it, too. First, you're conflating developers' interests and consumers' interests, and these are very much not the same thing.
Developers want to be able to have everything great about iPhones and iOS, but also want to be able to side load software to run on iOS without participating in the costs and controls that are currently required when accessing iOS via Apple's App Store. What's daft about all that is the willful obliviousness to the fact that forcing Apple to allow that will actually ruin many of the things that are currently great about iPhones and iOS, and it will actually
reduce consumer choice.
Lost in this conversation is a real understanding of where consumer choice exists. Right now (at least outside of the EU), consumer choice exists
when purchasing a smartphone.
Consumers can choose an Android phone, which follows the old Windows/PC business model that separates the creation of hardware from creation of the OS, and also has much looser controls on how you can install apps on that OS. Like the old Windows/PC model, there are downsides to that option, including privacy, security, and even software/hardware compatibility.
Alternatively, the consumer can choose an iPhone running iOS, which comes as a bundle, and has tighter controls on installation of apps. Many people choose this because they
want the tighter privacy, security, and compatibility controls. The downside is that you can't keep iOS and later choose to go outside of that closed system to source your apps. You can, however, keep the hardware and install a different OS, if you really want to.
Forcing Apple to make iOS more like Android
reduces consumer choice by taking away the option to have a device with the closed OS.
Developers want access to iPhone users. It's a more lucrative market. The problem is that many developers that currently comply with Apple's consumer protections to gain access to those consumers would gladly go the side-loading route if given the opportunity, so that they can save money by reducing quality control in app development and/or implement more predatory practices that are prohibited in the App Store.
As a result,
consumers who currently have access to apps whose developers are forced to play nice by Apple (things like asking permission before tracking location or cross-platform activities, etc.) will lose that access. If consumers want to continue using those apps, they'll no longer have access to a version with consumer protections. Who will maintain consumer protections then? The EU? Rather than improving consumer experience by "increasing competition," it will actually lower the bar, decrease options for consumers and decrease competition for access to those consumers.