It worked OK when we just wanted to run software written by a handful of trusted parties... Microsoft, Adobe, id Software. But as soon as there were 1000s of companies writing software that we wanted to try, running binaries ceased to be a good idea. I don't really trust any binary software on my machine that isn't written by Apple. But I will open basically anything in a web browser because I don't have to trust it.
Even now, with all the sandboxing, Microsoft and Apple still have to manually review software in their stores. And truthfully, app stores are basically a naive Web of Trust system. It's not safe at all. Applications constantly open up holes and then say "oops! Security bug!" and what... you're owned now? But Apple doesn't believe it was a maliciously placed hole, so it's all good? Hell of a security model!