If I'm understanding this correctly the competition wouldn't be dev vs dev but store vs store. If that is the case then your app becomes a commodity and each store will try to compete on price, lowering the dev's profit margin in the process.
That's like saying that having more than one grocery store hurts farmers. The farmers choose what price they sell their produce at, and the stores have to choose their own price based on how much profit they need to make on each sale.
In other words, nobody will be forcing these developers to be on a particular store -- unlike Apple's App Store, where you have to play on their terms.
Precisely. Stores aren't just competing to get users, they're competing to get developers. If one store offers a higher profit margin for developers then that store will have the best apps.
If someone could launch a competitor to the Apple App store, and say "I'm going to take half the margin that apple takes from app developers", I think developers would flock to that store, and then so would customers.
