A system is just an easy (speak lazy) way to visualize the "rules of the world". You just say "that's litRPG, it's how the world works" and be done explaining magic, combat and maybe even society and culture of most places instead of creating a character or chapter to experience those.
A system means in 9/10 cases you have a society where the number of your level dictates how much influence you have. Unless you're the MC, tho. We can't have those be bound by something that isn't a bondage session with their waifhusbandos.
This might be my personal bias speaking, but everything litRPG and even Isekai can do could be done almost the same way without them. Which tells me they're mostly just there to be there.
I am not sure why some people think that litrpg is the lazy way to make a power system, probably because they haven't actually written one. LitRPG is MUCH harder to write then people think, or at least write properly, anyone can write anything, it's a matter of making it good or not.
First of all in litrpg, the stats are the basic concept that visualized the rules, but there are a lot of fundamentals that make up the rules. That requires work from the author. You aren't done explaining magic, combat, society or culture simply due to it being litrpg.
Not to mention, by stating someone has 100 str, it limits the author in preventing someone with less str to be physically stronger. So the author has to do a lot of extra work in other aspects to go around it be it skills, gear, or other means. It's much easier in a non-litrpg, where the author can just have the person win in strength despite being weaker due to say, "power of friendship". Now of course that doesn't mean the author can't do the same thing in litrpg. But the problem with litrpg vs other genres is since the things are quantified, it is much harder for authors to get away doing that without completely ruining their litrpg.
As I mentioned before, the more you tell the reader, the harder it is for an author to write and be consistent. Because it becomes easier for readers to point out plot holes and other inconsistency.
To give a comparison, writing a litrpg is like saying aloud that you plan to get a perfect score on every test. And doing without it is like saying I'll get anywhere from 0 to perfect. The one who claims to get perfect score every test, the moment they get even 1 point less, opens them up for criticism, which is much less so for anyone who set no hard limits. And this is why most litrpgs soon stop being litrpgs and just turn into any other kind of novel when the author consciously or unconsciously moves away from it as they find it much easier to "be creative" then actually hold yourself to hard standards. That of course doesn't mean you can't do both. But doing it properly is important to writing a proper litrpg.
As for everything is possible to be done without it being litrpg or isekai, sure... but can't that be said about anything? That is the whole point of writing. There is no one way to do anything. This is why so many different stories exist. But they aren't there just to be there, they are there like any other element of the story, to portray an experience. Take isekai, you can of course put a local in there who lacks common sense due to being brought up in the mountains or some other place, or due to being sent into the future/past. But then here is the thing, would that local share similar cultural standards as someone from our world? The whole point of isekai, while being self insert also portrays a character who we can relate to, even if said character isn't us. This is much harder to do with a local, and actually gets weird when suddenly a local character starts having weird cultural values that don't fit their surroundings. Of course with tropes and overuse of anything, it's getting a lot harder to emphasize even with the isekai characters as now instead of actually being anything like regular people. Take the lack of common sense. Initially, lack of common sense was mostly due to either 1) a character not knowing the world's common sense, or 2) The person simply is too OP to care and does whatever they want. But now, it devolved into MCs who don't even know our own world's common sense and lack even basic human learning ability. But that is what happens when author's add tropes without thinking about how it actually fits into their world.
Long story short, don't blame the litrpg genre simply because it is being handled poorly. It is simply not as easy of a genre as most people think it is to write. It takes a lot more work then people initially think.
