I think the problem is that most people lie or are overestimating how much exercise they do. The human body is a pretty remarkable machine, we are very efficient when walking and running. Our biology is designed for it. So you won't burn that many calories by going for a walk or a slow jog. I find it amazing how slow some people can jog, and still think like they are getting a good work out.
From a quick Google search, it looks like 10,000 steps a day will burn 3500 Calories A WEEK. That's only an extra 500 Calories a day. That can easily be offset by eating unhealthy throughout the day.
I'm with you about what you are saying about diet. People need to eat a reasonable amount of Calories, but they shouldn't be putting their body at a deficit, and only eating 1000 or 1500 Calories a day. But exercise is a big part, because everybody will cheat on their diet from time to time. You have to exercise to use up the extra energy. Also, exercising keeps your lungs, heart, bones and muscles healthy. Eating just the right number of Calories to keep you thin, but you won't be healthy.