The problem is that most normal people (HN is not normal - mostly for the better) don't even understand what sideloading is - let alone actually care.
How can we fix this?
(aside from making people care - apathy enables so many political problems in the current age, but it's such a huge problem that this definitely isn't going to be the impetus to fix it)
Actually, they understand it just fine. The concept is very simple too.
Before this change you could install Android apps without registering your passport/driving license with Google.
After this change you will have to tell Google your real name and home address to install anything on your Android device. This is all. It can take a convoluted form of registering Google account or a more direct form of sending Google your identity documents to confirm "developer privileges". But you will no longer be able to use non-hacked Android devices to install anything without doing those steps.
P.S. I recall that some people still believe that they can create Google account without giving Google your personal details, phone etc. This is simply a self-delusion. If Google does not immediately demand you to cough up a phone numbers under pretense of "suspicious activity", that's because they already know who you are (you probably told them yourself by registering another account elsewhere).
No, "burner SIM cards" aren't real. This is just another form of self-delusion, — this time architected by US security agencies. You don't become anonymous by using those, you become watched.
This change means that people who do not use Google Play or other sources, fully controlled by Google, will no longer be able to install applications on Android.
Much of the ecosystem of Android apps that are only distributed outside the Play store will be affected by this, as many developers won't be able or willing to submit to this process or waive their privacy (especially young developers or those making apps that are legal but often targeted by litigious companies, e.g. emulators, YouTube clients/downloaders, BitTorrent clients, etc.)