Why are passwords needed at all if the user signs in using a code from Google authenticator?
I guess the first argument could be simply it being "single factor" once again. If you are using single factor authentication the password is the most convenient factor for people to use considering you do not need additional hardware and it is easy to implement.
Also a password is "easier" to store securely compared to a token. The token's security is completely reliant on your device security, it may seem trivial to you that you keep your phone safe (PIN code, encryption, etc...) but that might not be the case for all people.
I know the counter argument here is that in general people use password managers which must be kept safe equally or that, in case they don't, the password might be weak. But bear in mind that not everyone has a smartphone or might have the best security hygiene, in such cases the password is still the easiest to adopt since all you need is your brain to remember it.
If someone finds your phone, they have complete access to your account.
A single point of failure like this is what we're trying to get away from.