EDIT: BTW, does that mean that you are no longer arguing that worldbuilding requires creating an entire world (i.e., argument by scale) and only arguing on the basis of utility? If that is the case, I think your position and rounser's are much closer than I'd say they were before.
I never, ever stated that world building
requires the creation of an entire world. What I stated was that the
goal of world building was to create an entire world. How close you approach that goal will vary, but, in the end, when you world build, that has to be the ultimate goal.
Setting's goal is to simply act as a place for the plot (or the adventure).
You guys are the ones stating that world building requires building an entire world. I never stated that, or if I did, it's not what I meant. World building, as an activity, has as its goal, the idea of creating an entire place. With that as a goal, then elements like history become very important. You cannot have a world without history.
You can have a setting without history though. Keep on the Borderlands has little to no history.
World building concerns itself with all sorts of questions that setting doesn't. I used the example of glaciation to create a hill. From a setting point of view, we just need a hill and poof, the hill is there. If it needs to be a specific sort of hill (Hey, I'm not a geographer, what do I know?) then it is so. From a world building perspective though, we have to question why that hill is there. What forces acted upon our world to put that hill there. What is the hill's history? Who did things upon that hill? What impact has that hill had before now?
World building is never complete. It cannot be, even with the world's largest library. There is always more gaps to fill in. When the goal is to create a whole world, whether you start from a single village or from the first word of the creator, you can never be finished.
Setting, specifically Chapter 4 style setting, couldn't care less. It's not important who did what on that hill unless it affects the adventure in some way. Adding in halfling cannibal ceremonies on the hill could be a good way to add atmosphere, depending on what you are going for. But, I'm willing to think that this is a bit closer to the indulgent end of the scale than the necessary one.
So, to answer your question directly, I would say that you've misinterpreted what I've said. World building doesn't require a finished product. However, the goal of world building is a whole world in as much detail as possible. That that goal is not really attainable isn't important. It's still the goal.