When was the last "Massive iOS Mobile Botnet Hijacking SMS Data" headline?
When was the last maximum security prisoner getting run over by a bus headline? Sometimes freedom has its own risks, which includes idiots making poor decisions over where to get their software from. Does that mean everyone should be locked up in a cage to prevent that from happening?
No, not at all, but there are parts of this story that expose one of the weaknesses of the Android permissions model; namely that an app requests a set of permissions (that are overly broad to cut down on the number of permissions groups) and you have to either accept or deny those permissions wholesale. This affects apps from all sources, even reputable ones. On that front, the iOS model is better - it asks for permissions as the app requests them, so you can accept/block an app on a granular basis. So you could allow an app access to your location, for example, but deny it access to your contacts.
Given the flexibility of Android to be able to install apps from all manner of sources, I would have thought this type of security model would be better (or at least an option).