I've seen this catchphrase thrown around a lot online, but I've never seen anyone explain how consumption becomes any more ethical under any other system without leading to other systemic problems

"Consume less" seems to imply that any consumption is unethical by default. If that's the case, then the only way to consume ethically is by minimizing consumption

This seems like a reasonable stance, but it leads to other problems. Who gets to decide how much is enough?

If each individual decides for themselves, then we clearly have a problem because some people will never be satisfied. If everyone lets them continue, then they will hoard resources for themselves. This is sort of the situation we're already in

However, if we have the group (community, society, country, whatever) decide "how much is enough", then we have to have a group mechanism for making that decision, like a council, or government department

Then we need another group mechanism to enforce it, police, courts, etc. "Ethical consumption" becomes very authoritarian very quickly

If the idea is "We could have ethical consumption if people would just consume less" then you don't even have a starting point because "people will never just

So feel free to consume less if you think that's more ethical. That's what I try and do, myself. But I know that I cannot simply expect others to do the same, and I also don't really have any interest in policing how much others are allowed to have

In that sense, capitalism is a decent system that does not inherently dictate whether consumption is ethical or not. You are free to (and should) make ethics part of the value. If you like what your neighbourhood bakery makes freshly, you buy from them and thus encourage and enable them to make more. You benefit, they benefit. They give you a good price, but you do not buy more than you need (how much bread would a healthy person eat anyway?) because your neighbours also enjoy it. If you determine that a company is unethical, you vote with your wallet and buy from another (and tell your friends). You do your best.

What breaks this overall pretty sound logic of “give value to people who create value to help them create more value” in practice is a bunch of not unrelared to each other things like bad actors, information asymmetry (usually in favour if producers; in extreme: lying), or poor mental well-being. These imperfections lead to regulation (not without its own can of worms) and open up avenues for, indeed, unethical consumption.