I think this is a very pertinent question.  I would say that the reason for seeking informal solutions first is to minimise the damage that formal processes inflict on all parties involved - it is not just the alleged target and perpetrator who experience stress and anxiety through what can be a long, drawn out process, but everyone involved, including the wider team.  I would go so far as to say that there are no real winners in a formal process, whatever the outcome, and it becomes difficult, if not impossible, for people to continue to work together after a formal process has taken place.  If we hope to preserve working relationships, informal processes certainly have more chance of doing this than formal ones.

The other aspect of this is that the informal part of the process, as you point out, enables people to explore each other's perspectives and understand each other's points of view, which is almost impossible once the formal stage begins.  However, there are some allegations that are so serious that they should be dealt with formally from the start, and I would think serious sexual harassment allegations would fall into that category (but I would argue that it is the seriousness of the allegation that should determine the approach, not what type of harassment is involved - but that's just my opinion).  There may be other times when formal processes are preferable, such as when the target is particularly vulnerable, or when multiple allegations are being considered. 

In short, i believe it is right to use informal solutions if possible, but these should not override the need for the University to protect vulnerable people or take firm action when dealing with serious allegations.  Even in such cases, it is possible to use targeted coaching with perpetrators to help them to understand why their way of dealing with others is inappropriate and the negative impact of their behaviour on other people.  Mediation can be very successful in some instances, but this is usually when there is no great power imbalance between those involved, which is not usually the case in respect of sexual harassment cases.