The reason that the club championship is used is because if you used progress in the county championship were used you could easily have a situation where 2 clubs sides would lose in the county championship semi-finals which would mean a play-off,
Also using the club championship as the decider gives it that extra bit of profile/kudos/prestige as any club knows that winning it could mean a decent chance to represent Kerry in Munster if a divisional side wins the county championship, so it means clubs will treat it fairly seriously , which means more competitive games for players, which helps with player development which probably ends ups with more All-Irelands for Kerry.
Also the reason that there is a rule against Divisional sides taking part in the Munster & All-Ireland stages was that when they could they won the All-Ireland.