Personally I don't think we're getting like the US - their 'medals' are simply a means of wearing their CV on their chest. These are just means of telling what someone has done over their career. They have 'medals' too.
As for why it matters - personally (speaking as someone with both the TELIC and HERRICK medals), I didn't join for it, but I like the fact that the State has chosen to recognise the fact that I've been somewhere to work in an unpleasant, difficult and hostile environment and sacrifice a lot to be there. Its a small way of acknowledging that a lot of us have done something that relatively few in society are able to do.
I don't think we've got medal overkill - the only ones out there are TELIC / HERRICK and a couple of one offs for things early last decade like Sierra Leone. Denying someone the right to show with pride their acheivements seams hugely churlish to me.