Hardware/OS vendors should not be allowed to include app stores out of the box, much less prevent sideloading. We'd be nowhere near where we are today if PCs couldn't run Linux, and earlier PCs couldn't run whatever you wanted from a floppy. The fact that consumers are lazy and stores are easy shouldn't prevent decisions beneficial to everyone.
I have no idea who’s less wrong, Google or Epic, but I’m not sure I like your idea. Smartphones and PDAs existed for couple decades now, I’ve got a first PDA in 2000 or so. For many years before iPhone they were very niche products I’m not sure we had the explosion in popularity (followed by technical improvements of both hardware and software) had it not be the financial incentive from paid content, initially music,…
IPhone sales are profitable as they are, and always were.
Of course not having iOS walled would lower their profits, but that's the whole point, as this profit comes from a detriment for everyone else. Android allows sideloading, yet making those phones is still reasonably profitable.
PCs were expensive tools way before Linux, and it would stay that way if not for IBM were able to protect their walled garden.