The way kubernetes uses this streaming is to keep datastructures up to date in memory. A node needs a list of all its pods, so it makes a list call at startup and then starts a watch from that resource version onwards to keep the in-memory list in sync.

The whole architecture is designed such that the etcd storage backend could be swapped out completely and the only thing that would care is the api servers. Much like the transition from etcdv2 over http with json objects to grpc with etcdv3 and protobufs.

You can also create alternative implementations of kubelet, kube-proxy, the scheduler, the controller-manager, etc because they all access the data via the api server's well-defined public facing API and anyone using the API can easily watch objects in any programming language using the same semantics as the rest of the API. It also works from browsers, etc.

Additionally, kubernetes supports RBAC for nodes themselves such that they can only see updates for objects related to pods running on them - you wouldn't want any node to be able to watch all secrets in the cluster needlessly.

Overall, I think we'd lose a lot if kubernetes switched to having all of its components access the data store directly. Every operator ultimately needs the same things the controller-manager, scheduler and the other kubernetes components need