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I am well aware of it. It is an example of the traditional distribution workflow preventing a backdoor from landing into Debian Stable and other security-focused distributions. Of course the backdoor could have been spotted sooner, but also much later, given its sophistication.
In the specific case of xz, "Jia Tan" had to spend years of efforts in gaining trust and then to very carefully conceal the backdoor (and still failed to reach Debian Stable and other distributions). Why so much effort? Because many simpler backdoors or vulnerabilities have been spotted sooner. Also many less popular FOSS projects from unknown or untrusted upstream authors are simply not packaged.
Contrast that with distributing large "blobs", be it containers from docker hub or flatpak, snap etc, or statically linked binaries or pulling dependencies straight from upstream repositories (e.g. npm install): any vulnerability or backdoor can reach end users quickly and potentially stay unnoticed for years, as it happened many times.
There has been various various reports and papers published around the topic, for example https://www.securityweek.com/analysis-4-million-docker-images-shows-half-have-critical-vulnerabilities/
They have to watch hundreds to thousands of packages so having them do security checks for each package is simply not feasible.
That is what we do and yes, it takes effort, but it is still working better than the alternatives. Making attacks difficult and time consuming is good security.
If there is anything to learn from the xz attack is that both package maintainers and end users should be less lenient in accepting blobs of any kind.
You can use firejail or other sandoxes with any application packaged in any distribution.