I don't think that justification makes any sense because, more often than not, ALL investments just get transferred to another investment but capital gains are still charged on them.

How is, for example, selling stocks in Company A and using the proceeds to buy stocks in Company B any different, in this regard, then selling one house to buy another?  The first is charged capital gains, the second is not.

As for the tax changes, they would be complicated because if you are treating a primary residence like any other investment then you can start deducting interest expenses and maintenance expenses, just like what you can do with a rental property.  It isn't any insurmountable level of complexity by any means (as noted above the rules already exist for rental properties, recreational properties, etc.), but it would make things more complicated.