Putting the fund in the islands just avoids having to deal with all of the work of getting exemptions for the money going to the foreign investors.
I suggest that you spend some time actually researching why these things are done before commenting based on a preconceived notion learned from popular media.
Generally, if you want to bring that back, you will at least have to pay some sort of capital gains or dividend tax on that.
Second, pure tax havens (such as Jersey and the Cayman Islands) are one thing. But pretty much every developed nation has special tax incentives that exist in their tax code to attract investment. And it is obvious why they do it.
If we use Luxembourg as an example, which is generally a favourable holding and fund location, what can they offer? They are a small country with no natural resources. Smaller nations need to live off of intellectual capacity, meaning: outsmarting others.
There are various approaches (Singapore, Channel Islands, Luxembourg) to that, but ultimately, if you want to attract investment and tax revenue, offering an attracting tax system seems like a great way to do it.
I don't see the world introducing a globalised 20% corporate tax rate any time soon, for example.
I'm not advocating capital controls, but it doesn't make sense for us to allow people that by all means actually live and work in the US to set up a business elsewhere to avoid taxes. Because if tax havens were not allowed to exist, they would still set up in the US/UK/whatever, but would actually pay fair amounts of taxes.