I would have agreed with you five years ago. Today, Magnus Carlsen is known for being less booked-up than most elite players, playing openings just to get in the game, while rated #1 by a significant margin. So maybe there's hope.
Beyond a certain point getting better at chess simply means you got better at chess and nothing else.
No argument there. And isn't that true for most things in life?
The time commitment to becoming a world class player is such that consumes most of a young person's life.
I was a Master level player by the age of 17, through some talent, supplemented by hours upon hours of studying and coaching. This was not pushed upon me by parents, but more out of my own competitiveness. This is not a prodigious level - you should probably be an International Master by that age to be called a prodigy. I was only a top 10 or so player nationally for my age category, with a 0% probability of making a living or anything close to it from the game.
By the time I reached University, I all but completely abandoned chess. Studying Computer Engineering meant I couldn't devote enough time to it to stay competitive, and real life happened.
Same as you, I will teach my kids chess, and help them get to a certain competitive level, because I do believe that playing chess at a high level improved my brain function in a way that has helped me in other analytical tasks (e.g. engineering), but I won't push them to continue with it beyond a certain point.
Certainly learning to lose is probably a good thing when you are a youngster, but "everything in life" sounds miserable to me, and perhaps only reflects your worldview, and is not in fact an absolute as you suggest.
As a FM, I prefer that my kids do not study chess but something with more helpful side benefits, programming, math, basketball even piano.
I would have much preferred to become a master at programming that a chess master. A candidate master in programming can make a pretty good living, while a chess master would be living in a park.
It is as Buffet said "Do something that you do not hate for a living".
I was spending 2-3 hours each night by myself alone and really enjoying it. I was also paying IMs for lessons. I was improving a lot. However, I was alone most of the time and couldn't share my experience with anybody. There was also very little tangible benefit to me other than entertainment and mental stimulation. Two things I can get elsewhere. Since I do have a masters degree in computer science I decided to focus on two things: Software Engineering and Violin.
I took up violin and haven't looked back. I had zero music ability an when I started couldn't read music. It's the same amount of hark work as chess. Like chess, I probably started too late to be anything other than an intermediate player. The difference is, I can play for my wife and my parents. A random person on the street can appreciate what I'm doing. I try to practice only 30 minutes a day.
I also doubled down on software engineering. Instead of spending 2-3 hours playing chess, I spend more of my evenings writing code.
Playing sports is great but becoming a swimming world champion, for example, is just hours every day of swimming. Hardly world-changing or helpful outside the pool.
Now, I think this is accurate for essentially single player sports. Golf and the like. Many competitive sports, however, you have to adjust what you are doing based on what your opponent is doing. Not just in a "correct" way, but to account for changing circumstances.
1. Forced moves 6% check with a forced move, forced defensive move, etc.
2. Book moves 28% opening moves following the opening book
3. Clearly best moves 30% there's one clearly best move out of all the moves on the board
4. Discretionary moves 36% there are many best moves, so one person would choose one move, but another person could choose a different move, and neither would be "right"
What does this mean for your playing?
It means that there is not always a best move, and so you shouldn't obsess over trying to find it. You have to accept discretionary moves.
This is what gives rise to chess playing styles.
I'm also assuming for a large portion of the remaining "discretionary" moves, there is a "clearly bad" set of moves that should not be picked. This is a large set of things you have to memorize that are not really based on what or how the opponent will play.
As opposed to a game such as tennis. Where you really have to consider not just what you are capable of against a volley, but what your opponent will do with it.
Is this akin to saying that top level tennis games are rarely decided by double faults. Likely true, but completely ignores the point that learning to serve over the net correctly is a vital skill. Just as learning a vast repertoire of studied moves and board continuations is key to chess.
The magic of the game to me is/was in working hard to figure out how to out-think, out-strategize and even trick your opponent. And, yes, that still exists. World Chess championships are not robotic regurgitations of prior games. Some aspects of them might be, but there's plenty of hard thinking applied as well. All I am saying is that you reach a level beyond which the only way to progress is to become a database and that's simply not interesting to me. I also happen to think it is an absolute waste of time unless you happen to be particularly gifted at chess and have aspirations on the world stage.
This is the reason I don't encourage my kids to continue playing competitive chess beyond a certain stage. One of my kids was killing it in local competitions all the way up to the stage where kids started to become walking databases. I wasn't going to do that to my son. There are better things to focus on in life.
The other realization was that getting better at playing chess didn't make you better at everything else. It is a fallacy to think that because someone is amazing at chess they have superior reasoning abilities in other domains. That is rarely the case. There are early to mid-stage cognitive gains to be had from learning and playing chess. Beyond a certain point getting better at chess simply means you got better at chess and nothing else.