Part of the idea is that journals help curate better publications via the peer review process. Whether or not that occurs in practice is up for some debate.
Having a curated list can be important to separate the wheat from the chaff, especially in an era with ever increasing rates of research papers.
Eliminating journals as a corporate monopoly doesn't eliminate peer review. For example, it should be easy to show the number of citations and even their specific context in other articles on the arxiv-like site. For example, if I like some app/library implementation on github, I look at their dependencies (a citation in a sense) to discover things to try.
I think citation is a noisy/poor signal for peer-review. I've refereed a number of papers where I dig into the citations and find the article doesn't actually support the author's claim. Still, the vast majority of citations go unchecked.
I don't think peer-review has to be done by journals, I'm just not sure what the better solution is.
I’ve definitely encountered such cases myself (when actual cited paper didn’t support author’s claims).
Nothing prevents the site introducing more direct peer review (published X papers on a topic -> review a paper).
Though If we compare two cases: reading a paper to leave an anonymous review vs reading a paper to cite it. The latter seems like more authentic and useful (less perversed incentives).
Having a curated list can be important to separate the wheat from the chaff, especially in an era with ever increasing rates of research papers.