To stop all the letters. I had no TV for a couple of years and we would get letters all the time. Even when told the inspectors would still try and come round. They even faked who they were once, pretended they were here to deliver a package.
An irrational sense of not cheating quite as much. A vast overestimation of TV Licensing's ability to detect you - something like correlating cable/satellite subscription databases with license payers list (as if paying for cable, but claiming to own a BW TV set isn't a red flag) and the nefarious detector vans.
The physical principle is that they detect the leakage from the local oscillator in the superheterodyne receiver circuit.
I very much doubt that they exist now, if they ever did. It just isn't cost efficient compared to sending out letters and low paid inspectors who peer through windows looking for people watching TV.
The only means I know of for one to reliably detect the image on the screen would be TEMPEST style attacks [1]. I doubt that Capita can afford to buy the necessary equipment, or even views it as economically viable given the volume of letters they sent out - 56 million letters were sent in 2009, for example [2].
I'm not sure if modern TVs will even emit anything obvious since the connection from the decoder to the panel is covered in EMI shielding.