It is little surprising a lot of smart people somehow miss this simple logic.
Android is massive and extremely popular and I know several people who have been scammed already. It is important that Google makes this harder for scammers.
Google is not doing this to harm developers but to protect their users.
You already get a pretty scary warning when you try to install an app that was downloaded outside the Play Store. If people still install malware, that's the responsibility that comes with freedom. Your line of reasoning can be applied everywhere in life - people should not be able to do their own bank transfers or use a credit card, I know several people that who have been scammed already.
Moreover, there are better ways to protect against malware: 1. educate people; 2. rather than using whitelisting, use blacklisting (similar to XProtect on macOS).
Finally, the argument is not very strong on Google's side, since the Play Store itself has had its history of scams. Which, again is easier to protect against by educating people. No, don't put your banking information in a random app you downloaded from the Play Store (use the app that your bank tells you to). Do not install random keyboards from the Play Store. Etc.
This is "think of the children/grandma" logic. There is a different between maintaining a company store where everything is verified, and forcing everyone to use it.
Google shouldn't be able to hold a vertical monopoly, on what apps can run, what os's are allowed and what hardware can be used on devices that run Android, rest solely on this weak excuse that someone might harm grandma.
Oh, and of course, if grandma gets scammed by a app in the Google store, Google isn't in any way held responsible. Such garbage, two-faced bs.
Android is massive and extremely popular and I know several people who have been scammed already. It is important that Google makes this harder for scammers.
Google is not doing this to harm developers but to protect their users.