Because ICAO is the lowest common denominator. Some state licences meant something; showed you’d achieved an admirable standard. Now, it’s all horse****. The problem with the lowest common denominator is how low it turns out to be, in modern times.
Let me guess, you are from the UK? You know there is no Empire anymore right? Those MBEs and OBEs seem a little odd with no Empire to be an officer in. Anyway, enough fun. There is some truth to what you say about standards but that is merely another reason to have an ICAO standard licence. Airports and regulatory agencies around the world are audited by ICAO so licensing could be the same. Australia has a fairly tough exam system, not many get through with a "kellogs licence". People decry the US system of having the bank of questions available to peruse but they dont seem to crash aeroplanes at any greater rate than Europe do they?
It just beggars belief that the Qantas plots flying into Heathrow on the B787 are not suitable to fly a G registered B787 in the Europe unless they do the fourteen exams. What problem is that solving? How does it enhance safety? So an ICAO licence system which has a strong syallabus and exam system makes more sense. Followed by a jurisdiction specific Air Law exam but again, as time moves on the various difference in air law are becoming less and less.