I don't disagree, but I think you're conflating secrets with environment variables. Yes most secrets are (or should be at least) passed in through env vars, but there's also a ton (in some apps 80% to 90%) of configuration that aren't secrets. I also dislike when people treat every config value as a secret. Secrets require additional overhead and care, and burdening yourself (or another dev or operator) with that in order to tweak a completely non-secretive value is unnecessary and IMHO often counterproductive.
For secrets, a .env file is fine for local dev and docker-compose IMHO. The "hidden file" nature of a .env is a good fit for secrets. (For prod I prefer K8s Secrets or Vault or similar)
I've had to debug by tuning multiple vars and compare the results, .env files make this a much cleaner experience especially if the CMS supports a .env file name parameter. I can keep multiple .envs and switch between them easily and know for certain that a change in behaviour isn't due to fat fingering something in the compose file.
In the end it's just personal preference. I get where you're coming from.
For secrets, a .env file is fine for local dev and docker-compose IMHO. The "hidden file" nature of a .env is a good fit for secrets. (For prod I prefer K8s Secrets or Vault or similar)