Re: It's not Either/Or
"my mother in law definitely doesn’t. At the moment, her iPhone keeps her safe - with your suggestion she’s be open to attack by predatory phone calls and social engineering."
Right. The scammer on the other end will tell your mother-in-law to go into settings, down several levels, turn off a security feature, agree to the warning, go to a site, install an application, agree to a warning, launch the application, agree to a warning, agree to several permissions, and then they can do their evil deeds. That's not what they will do. They will get her to open up a website which has nice convincing logos and enter in her passwords and account details. The risk of social engineering is already there, and what they can already do is much stronger than anything this would gain them. Especially given that Apple wouldn't have to let sideloaded applications have extra powers--they could and almost certainly would live in the same sandboxes and have access to the same permissions that store-loaded apps do.
IOS is pretty secure already but it's not the App Store people who make it happen. It's the OS developers who make it happen.