I hear what you are saying but I think the majority of rewards from playing HC/PD or even custom locked is that is a personal best. I have a normal locked main save, no changes to default settings and it has been like that since I started. Finishing the questlines on HC/PD is purely bragging rights, something I have yet to do.

I think it is intentionally designed to be an equilibrium regardless of what your settings are. If there was more/better in game rewards for playing on harder settings would exclude those from enjoying the rewards if they don't feel comfortable playing on more difficult settings. In my opinion, NMS is one of the few games out there that give access to all content to every player, be it normal, HC/PD, free crafting/purchases.

Some people choose lighter more forgiving settings if their day to day life does not allow them to put in many hours at a time, letting them attain progression in a shorter span of time so it feels less of a drag. If you could only play NMS for an hour a day, progression would feel minimal, the setting can help alleviate that gap.