That's like saying "The USD is used as fuel for the US economy." Even talking about more crypto-concepts as gas fees doesn't negate this. It's not some "other purpose" and courts won't buy such disingenuous spins.
What level of detail do you want?
People have a need to secure their transactions from double-spends and stealing etc. I personally think blockchains are a first-gen technology but the network requires ETH to pay for transactions. What is your point?
But about whether it can never be considered a security? In theory I agree with you. Just because something has utility, doesn't mean it's not a security by the Howey test. Today the SEC says one thing (ETH is not a security). Tomorrow under different leadership they can turn around and say it is. Good luck convincing a court, though.
And Howey is just on the federal level! As I have already said -- most Kickstarter campaigns are actually unregistered securities offerings, according to the Risk Capital test of California and a dozen other states:
https://www.cuttingedgecapital.com/what-is-a-security-and-wh...
Proceed at your Peril: https://ir.law.utk.edu/cgi/viewcontent.cgi?article=1828&cont...
Silver Hills case established the Risk Capital test:
https://www.jdsupra.com/legalnews/silver-hills-doesn-t-mute-...
And in fact, nearly everything can be a security if you try hard enough:
https://www.linkedin.com/pulse/everything-security-chris-har...
So "how it works" is whatever the system happens to come up with in court cases and precedents. The definitions vary from jurisdiction to jurisdiction and are vague as it is. After all, capital invested into anything is "put at risk", even if by the Howey test it's not. While in Singapore, the definition of security is a lot more narrow. And FINMA in Switzerland seems to have a much more sane system specifically for tokens:
https://www.finma.ch/en/news/2018/02/20180216-mm-ico-wegleit...
This is why blockchain and Web3 innovation is leaving the United States