Electronic – Why is the earth a viable return path for power distribution

TLDR: better design is not affordable.

Technical root cause is the limited speed of light. Natural root cause is the conflict of economy of scale vs redundancy requirement.

Every energy supplying element in system is protecting itself by disconnecting, stopping the supply. Disapperance of supplier, causes increase of individual load on other suppliers. Which in their turn disconnect themself. The blackout escalation behaves very much like an avalanche.

The proper design must have granularity of demand control (consumer's pool) be finer than smallest individual supplier, and total supply capacity must be greater than total demand by at least one unit of supplier's granularity. In theory the redundance of suppliers must protect from blackouts. But in reality the granularity on both sides is too coarse, and is impossible to be made finer. Because downsizing is in conflict with economy of scale. Every power plant, distribution line and other elements are built to be as large as possible and point of connection to consumer always exceeds the optimal size granularity wise. Just because of market competition it is not possible to limit the size of lines, power plants and other elements.

The solution can be found only in regulatory space. Say: add the smart load control capability to all household Energy-Star rated equipment and introduce concept of "quality of service", complex system of tariffs, uplinks, protocols, etc.

There are several reasons. One: power loss in a wire is I^2 * R. Therefore it is better to transmit power at very high voltage and low current. AC is much more easily boosted to high voltage (no electronics are needed). To boost industrial loads using silicon electronics is not practical.

Another is ease of switching under load. If you turn off a load connected to DC, the arcing at the switch due to wire inductance and load inductance becomes problematic. This forces DC switches to be more robust.

The 60 Hz noise created by transformers is much less than the switching noise that would be created by all the electronics required to buck and boost DC and then convert it to AC at point of load as you propose.