My personal opinion is that the severity of consequence should be relative to the people the crime affects.
Theft (retail, insurance, etc) exists in this weird limbo where the primary victim (the business) isn't the customer. However, it's ultimately the customer who pays.
So light-touching theft prosecution is effectively not caring about taxing customers. Most of whom don't even know they're being taxed.
Maybe your state is different, but I wouldn't call it light touching in my state. First offense, is a summary offense if the merchandise was under $150. That's a fine, restitution, and up to 90 days in jail. So possibly a light touch if there's no jail time, but generally going to jail means losing your job and such for lack of attendance. Higher amounts or subsequent offenses constitute misdemeanors (up to 3 years in prison), or felonies (up to 5 years in prison. Even without prison terms, people can lose their job, be denied jobs, lose their rights, etc from these higher level penalties. Which I think is fine when there's this step grading for value and repeat offenses (still some outliers like a man getting a felony for a candy bar, although it seemed like he probably had a mental issue that was causing these low dollar thefts, so probably needs to have some exception to get these people treatment). I believe this serves the purpose of preventing and rehabilitating low level offenders so that they don't become larger offenders in the future, and if they do then they get higher penalties.
That's not exactly true. There can be items that are confusing, such as whether or not a bin or bucket comes with a lid. With the advent of self checkouts, it's also possible that someone rings up an item incorrectly just by accident, especially with non bar codes items. People could be prosecuted for this depending on the state's requirements. The burden of proof can be quiet low.
"But nobody is stealing a $500 drill because they're starving for power tools."
Here you are using $500 as an example. Do you feel the same if someone takes an extra 10 cent washer?
"If we want to talk about humane solutions, carve out an exception for food theft."
I don't think food theft should be an exception - just the same as the current grading tier. There are many programs and food banks that people can use to get food.
What are your thoughts on other crimes with different gradings? Should assault always be a felony? Should speeding always be considered reckless endangerment?
Again, the grading is supposed to provide an appropriate punishment based on the severity of the crime.