Hasn't LEO adopted an early form of this where they would let accounts from ETH still use LeoFinance without an actual Hive account and just publish from their own account?

You can create a Hive account with an ETH signature, but the Hive account still gets created.
It really depends how you are defining "Lite Account".
So far, all "Lite Accounts" are on layer one and are just regular Hive accounts that someone else controls.

In essence, this doesn't reduce the number of Hive accounts created, it increases it by making account creation more accessible.