Developers like that they won't have to pay the "Apple Tax" because users can side-load. Whereas users like that they don't have to pay developers because they can side-load.

The killer app for jailbreaking/sideloading on Apple's handheld gaming system is ... running unlicensed games?

So basically similar to jailbreaking/sideloading on Nintendo's handheld gaming system?

Perhaps one difference may be that popular iPhone games are "free to play" with intrusive microtransactions, while Nintendo games (especially first party) cost more up front but avoid microtransactions. Also iPhone games tend to be "live service" while many Nintendo games can be played offline (or on a LAN for games like Mario Kart or Smash.)

iPhone game developers may be able to leverage online DRM schemes in "live service" games to block unauthorized players of sideloaded games.