You're missing the point. If you don't grade homework, most student won't even try to do it, and as a result, won't learn anything. The students are not there to learn anything, they're there to get credits for the diploma. If you don't force them to learn, most students won't.
Now, to be sure, in my preferred world, the students who are not motivated to learn, are promptly pruned from the rolls. But I don't get to decide that: the private schools make money by pretending to teach, so they're incentivized to retain paying customers, and the same is true in public schools, which are expanded and maintained by politicians who believe that high college diploma ownership rate is somehow good.
I guess what people are arguing is your assumption that if you don't grade homework, students won't try to do it.
I understand it's common in North America to have TAs grade homework. But in many places in Europe (top places), they do not grade homework but provide solutions. The only thing that matters is a semester project and a final exam.
That is a real-life counter-example to your assumption. The students indeed try to do the exercises in earnest. And TAs can be useful by providing in-person discussion, rather than grading exercises.
I was, in fact, a TA at a university in Europe, and, rest assured, not all students earnestly tried to do the exercises. Moreover, very few students are interested in in-person discussion: we had office hours twice a week, but few people ever came, except during the week before midterms and finals. I had many discussions about it with professors. One of them is pretty active in Facebook group for students, reminding them of the office hours, where they can get free one-on-one tutoring. Still, most of the time nobody comes to his office hours anyway.
I think the conclusion here is very simple: students are not there to learn, they are there to pass exams and earn the diploma.
Now, to be sure, in my preferred world, the students who are not motivated to learn, are promptly pruned from the rolls. But I don't get to decide that: the private schools make money by pretending to teach, so they're incentivized to retain paying customers, and the same is true in public schools, which are expanded and maintained by politicians who believe that high college diploma ownership rate is somehow good.