The problem for Apple is how valuable iOS owners are compared to Android owners and how iOS owners are going to be less security focused as they've never had to be. People on iOS just assume they are fairly ok, and rightly so. Even if the apps are sandboxed there are going to hidden API's that Apple won't be able to stop software using that can create exploits etc.
Its not really about self propagating viruses and stuff anymore, more about how easy it will be to use social engineering (tricking people) in to exploits and there will be no oversight and no ability to shut that app down using the keys apple have.
This along with a phone being a primary personal device for safety (it is a phone after all) which is completely unlike a PC or games console. The reliability aspect of a phone is a huge deal and you don't really want to jeopardise that.
The EU claim Apple can make side loading ok without any bs and point to Android etc. But in my understanding, Android is an inherently unsafe OS in the same way Windows is. And yes it's much better than it was, (took them a decade or so, but whatever...) but I wouldn't bet on it's security aspects unless you are very stringent anyway. And that's not what Apple wants for its customers.
I think the long term bet for Apple is that with millions of apps, no major exploits and billions of customers used to easily adding and removing apps from their store, customers are going to continue to do that. There will be an automatic distrust any dev who isn't a really big name / company to allow for side loading. Also, I feel that Apple may say that you have to either do a one off, side-load for everyone security change or per app (which will be even more tedious). And software dev's will think its not worth the 30% gain trying to implement this or the loss of customers who don't trust doing it.
Even though I'd love an emulator etc.. I don't think I'm going to change security settings for one. I've been there before and I don't think it's worth technically jail breaking my primary life device for some app. That's what my PC is for.