Generally, the issue is one of "expert judgement"
A product owner can be a technical expert as well as a product expert who knows what customers need.
If you only have what a customer says (not what they really need,) you can lose that important bit of judgement.
Customers may have little or no technical expertise. They may ask for things which seem interesting but have huge technical risks, huge cost and little practical value. But, since "the customer's always right", stupid things get built for stupid reasons. Or -- worse -- someone attempts to build a stupid thing and fails, so the project is cancelled.
A product owner can temper the customer's opinions with more rational decision-making and create a product which will meet the customers true need and bypass the customer's whims.
Ultimately, all development is for a customer. Period.
However, the question is wether the developers interact directly with customers or via a product owner.