Forgive my luthier ignorance here. It seems in my uneducated mind that removing material in 20+places on both sides of the binding would also be labor intensive. Is it that much easier than removing the back sides of the frets?
Yes, because it’s easy to automate removing plastic following the contour of the fingerboard and frets. They fret the fingerboard, using a long roll of fret wire, only making one cut per fret; sand down the fret ends flush, then glue on the binding and machine the binding down to the surface of the board and frets. It’s not a very skill dependent method.
To do it the correct way, each fret must be cut first to rough size, then the tangs are ground down with a file, Dremel, or cut with a nipper. Then the fret is hammered or pressed in over the already installed binding and cut flush, then beveled with a file. It’s a lot more skilled handwork.
By the way, that’s why stainless steel frets cost so much more. It’s so hard, that the tools to do all of the above don’t last too long.