I'm sure security is part of the reason for the ever increasing locking-down of android ... but I'm more sure it's an excuse and that security FROM the user is a huge factor in google's thinking.
I'm sure that being an app store owner exposes you to the absolute worst just most constant stream of really really awful people doing the worst things, like, forever & ever.
There are some warped incentives too, for sure. But I do think Occam's razor explains why app stores get to be worse & worse & worse: because they are responding to horrors.
I'd love to see some better mechanisms for trust emerge. Software as it is is basically unobservable. You grant or don't grant some permissions & otherwise have no idea what's actually happening. So app stores are the only arbiters of trust.