Probably you need some kind of "court" system. Or maybe if enough dedicated servers say you're cheating, they just ban you.

Yes this is more effort but from the company's perspective they outsource most of the effort to free labor. It can probably be abused if enough admins from different servers band together though.

From a labor exploitation point of view it's really hard to argue that that model is better than kernel-level anticheat.

Exploitation is a strong word. A lot of admins like running servers, and some even make money via ads. This is the case in TF2.