Well it would have likely solved the Note 7 recall, and any futures battery recalls. It would also allow a user to remove an unsafe battery so that it's not in use while waiting for a replacement.
I thought the problem with the note 7 was with the power controller, and not the batteries -- didn't phones continue catching fire after the first recall?
If the Note 7 hadn't been recalled then eventually many more would have probably caught fire. We'll never know what the cumulative failure rate would have been if the devices had been left in the field for years. Eventually people would have been killed.
The fraction of phones that caught on fire was similar to the fraction of hoverboards that caught on fire. Normal products with similar batteries have a much lower failure rate.
When you decide whether a risk is unacceptable, there are two parts to consider: the likelihood of the event, and the potential worst-case scenario should the event come to pass. .01% is a very low likelihood, but the worst case scenario that one of these phones maims the user is an extremely bad outcome. In this framework the recall is the most sensible thing to do.