I mean, it's not great, but imagine if it was so cheap and fast we could test the entire population on a consistent basis.
In a hypothetical scenario of 1% of the population actually having COVID and 9% testing false positive, you could ask all 10 positive results to self-quarantine and that'd probably be a pretty effective way of shutting down the virus without asking the whole population to stay home.
Once the virus spreads more, it gets even more reasonable. (If it gets crushed more and there are very few cases, it does get a little extreme to call it useful though).
You need to also take into account the false positive too (1% iirc). Under your priors a group of 100,000 people will have 1000 infected and 99,000 not infected. Specifically:
So going through your plan will isolate 8,910 + 990 = 9900 people (9.9% of the population), catching 990 actual cases and letting loose 10 cases.
In other words we can isolate 10% of the population and reduce the number of carriers by 990:10 ratio. This seems more effective than the current 100% isolation. All we need is the tests now.
In a hypothetical scenario of 1% of the population actually having COVID and 9% testing false positive, you could ask all 10 positive results to self-quarantine and that'd probably be a pretty effective way of shutting down the virus without asking the whole population to stay home.
Once the virus spreads more, it gets even more reasonable. (If it gets crushed more and there are very few cases, it does get a little extreme to call it useful though).