It's because they're not people, they're property. Good ol slavery.
Interestingly enough during Lemons trial it was mentioned that in other nations the girls are essentially property of the state, more so because of their military value, and are forcefully conscripted. The implication being that the girls living in this society can live how they want?
Usually magical girls stories are localized at one place in time from my experience, but with that reveal the author opened the possibility that there is something supernatural at play in this society that employs the Defeat Trial instead.
Would it be a surprise if some of the people in the Peanut gallery were monsters in disguise?
That's a common undertone of modern misogyny, women seen as pieces rather than as people. There's a lot of dehumanization in many forms of oppression. You don't have to treat someone as equal to you if they're not "really a person", at least mentally.
Misogyny is a form of violence and it pairs well against a group that are uniformly girls (
thematically speaking don't get any wrong ideas)... well there are former boys too, but they are treated just as badly.
Run of the mill violence can only get you so far against entities that are fueled by virtuous feelings, destroying their spirit through humiliation seems more final.
Yuuri fights for their dignity which is an interesting turn on things since magical girls usually fight monsters or evil villains while here they don't really have a clear enemy (
yet) other than the system that forces them into these situations.
I still wonder if the author came to this compelling setup completely by accident or not...