I don't think the smartphone market is that consequential either way. It's a mature and played out end-user product already, not comparable to the early AT&T. If Apple could somehow be forced to properly support third-party app stores then so what. Forcing full PWA support would be much better, but still. I don't think it'd usher in some tech boom or meaningfully help consumers.
Personally, I don't fw apps anyway so whatever. Even if the govt wants to force iPhones to be like shitty Android then that's alright, I'll keep my old iPhone then deal with it when needed.
Probably just a more visible "install" button would eliminate the need for half of native apps. I've tried doing a PWA before, and despite iPhones having all the right capabilities for it (they even support push now), users were totally confused installing a PWA in the first place.
Beyond that, in theory, very few things need to be native apps if OS-makers really wanted to embrace PWAs. WASM and all that, and equally importantly, access to more native APIs.
I think people could have said the same thing about the phone network, because it wasn't obvious what they were missing: everyone already had a phone, after all, and they worked just fine; I guess we could open it up so more people could make phones but do you really think that is going to change the world? Turns out it did, and it shouldn't be lost that Apple is a beneficiary of this... imagine if they, at best, had to pay AT&T a 30% "core technology fee" on their sales of iPhones because the iPhone was using the phone network or, at worst, were simply never allowed to make a phone at all. Apple controlling what is viable to release and then making it 30% more expensive is absolutely having massive effects on the market and is slowing down innovation, whether you see it or not (and even if it somehow in a crazy turn of events actually didn't, we should still want our price break from real competition).
Personally, I don't fw apps anyway so whatever. Even if the govt wants to force iPhones to be like shitty Android then that's alright, I'll keep my old iPhone then deal with it when needed.