An "even" playing field
If you put the average player at the same starting point as all other players, there's a small hope of them actually ending up on top. One's logical mind may realise it's completely unrealistic, but this hope may still be there.
If you can see all those players between you and the top, this is much more demotivating than a clean slate (even if the end result would be roughly the same).
This also applies to any rewards and your hope of getting those.
Seeing how you do against the best
This is similar to the above, but goes beyond that.
Often it would be roughly impossible for an average player to get matched against the best of the best players, due to how the matching system works.
It can simply be a nice challenge to directly face one of the best players (or at least a much better player), see how you'd actually do against them, see how they'd respond to what you do and potentially learn from it, even if you get completely demolished.
Resetting rankings gives a much better chance of this happening.
Variation in ranking is a fact, how much is hard to determine
Many games have some element of randomness, having bad days happens and the ranking system may have some issues. This may also disproportionately affect certain players, characters, roles, etc. (e.g. certain characters may heavily rely on randomness or a "support" character may have a harder time supporting teammates that can't fulfil their role, or be in a much better position to highlight the strengths or negate the weaknesses of their team).
Now you may say this effect these factors has on ranking is minor and you'd never be too far from your "true" ranking, and this may be true, but this effect may also be much greater than you imagine.
One way to potentially test this, of course, would be to reset rankings.
Mentality is reality
Believing something to be true can make it true. If a player believes they're in "elo hell", they may be demotivated and end up playing significantly worse than how they'd play under other circumstances (or they may end up saying or doing things that demotivate their teammates, even if they themselves don't play much worse).
How long would it take to climb?
Let's say you're not where you belong. What percentage of games would you win? How long would it take to climb to where you belong at that percentage? Of course you should win a lot more if you're far below from where you belong, but it may still take quite a while to get where you "belong".
There are also high ranking players playing on low ranking accounts, to either just increase ("boost") the ranking or because they enjoy the easy wins. Whether this makes up a noteworthy portion of accounts (and thus affect one's ability to climb at that level) would likely depend on the game and the ranking level.
Players need to actually play
If there's no reset and a top player stops playing or just plays less, they may actually keep getting the top player rewards for a few seasons. A reset forces players to play ever season to get rewarded, which encourages players to play more (increased engagement is good) and makes it more likely for players to rank higher (since they won't be competing with players no longer playing the game).
Making players happy
Sometimes you give in to the requests of players, instead of dismissing them, because making and keeping your players happy is important, even if what they're asking makes no sense to you. Although there is a risk that they're not being realistic and it ends up being a disappointment or your idea of what they want is different from what they actually want. Might the majority of players be disappointed enough with ending up at the same place after a reset to stop playing? I suspect not, but I might be wrong.
As an anecdote, I was quite an avid Dota 2 player a few years ago. I hypothesised that the ranking I was stuck at may not have reflected my ability (especially since I've learnt a ton since getting that ranking). So I created a new account (since there is/was no free ranking reset). With that account I ended up getting a ranking significant higher than my original account (from about 3.5k to 4.5k, if I recall correctly). I suspect demotivation was a big contributor to being stuck.
Although I do suspect most players who believe they're stuck in "elo hell" may be misjudging their own ability and resetting their ranking would likely put them in roughly the same spot.
Note some games have a season ranking separate from your regular ranking, and in some cases allow you to optionally replace your regular ranking with your season ranking (if it's better). Dota 2 is/was one example, I believe. This might be a negate the downside of resetting ranking, which is that players become attached to their ranking and resetting it would frustrate them.