I agree with you OP.
I understand that in an ideal world people should be sticking to the 14 day rule, as that minimises the chance of a "slow incubator" releasing themselves too early, but as you've pointed out, compliance is very low. It doesn't seem obvious that doubling down on this requirement is the best way of minimising the number of symptomatic and immediately pre-symptomatic people infecting others. Surely it is better to stop some of these infections by increasing compliance, rather than insisting on a really difficult thing that would be more effective but no-one does! Balancing risk and benefit as pp have said.
I'm not sure why people aren't complying, but there are presumably financial, practical and psychological barriers. Some people may just object in principle to self isolating... these people may rebel by going on a pub crawl, which is immensely unhelpful, but they would do this regardless of the time period.
However, some people may not be able to afford not to work, so they may at present carry on going to work (maybe paying more attention to masks/distancing, or maybe not). If a 7 day isolation was brought in, they may feel more able to suck up the smaller loss of income, and decide not to do that (or it would be cheaper for the government to support that loss of income rather than 14 days, if that route is taken). Some people may just not feel able to stay inside for 14 days, so go out to do a bit of exercise, pop to get a pint of milk or so on. These are probably less "dangerous", but even so, 7 days rather than 14 could seem more manageable without them resorting to these activities.
I think a 7 day isolation could seem fairer for "lower risk" contacts. For example, non-household close contacts of an infected person who almost certainly aren't infected (entire year groups of children self isolating for a single positive case at a school for example). They are effectively taking one for the team, and 14 days is a loooong time not to leave the house at all, for no benefit to themselves (though possibly considerable financial loss to them or their family) and likely no benefit to society either, assuming they aren't infected. Even symptomatic people get let out after 10 days!
If 7 days was the required period (though saying 14 days was preferable if possible, and maybe required for close contacts within a household) I think there would be higher compliance overall, and more cases would be "caught" overall, even if some went on to develop symptoms. Obviously, for those that wanted to isolate for longer there should be protections in place employment-wise.