Things having diminishing returns can be explained perfectly well by the more natural view that a decent human life (or society) is made up of different components that are not tradable with each other. In other words, a holistic view.

There is nothing odd about the idea - for example, we need all of the vitamins, you can't drop vitamin A and make up for it with more vitamin D.

I can't see what possible advantage that utility theory could have over this when modelling or in any other instance, except to create a spurious circular ethical “justification” for the free market.