You ask what is the idea of this argument.
Suppose you decide my goal is to make a subset.
For each element you have two choices as to whether to put it in your subset or not. So there are $2^n $ total results of $n $ choices. Each result yields a distinct and unique subset. (For a result to differ from another result there must have been one element where you made a different choice. One result has the element in you subset and the other doesn't). So there are at least $2^n $ subsets (at least one for each result.)
Now any possible subset can be the result of a string of chooses. The result of choosing to include precisely the exact elements of the subset and to exclude precisely the exact elements not in the subset, will result in precisely that exact subset.
So the number of distinct subsets is the exact number of possible choice results. Of which there are $2^n $.
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That is the meaning of that argument. However if you prefer another approach there are others.
(The argument that always "worked" for me was: For any individual subset and any individual element of the master set there is one alternative subset that is exactly the same except it differs in whether it contains that one element or not. So subsets come it pairs based on elements.... and that's enough for me. But it's a pretty vague argument exactly how we group and combine the pairs but that never was my issue.)
(An argument some people like is to take all the subsets, divide into two groups, those with element #1, and those without. Then divide those two groups into two, those with and without element 2, and so on, clearly each step will result in splitting every group [you'll never have a point where you notice "gee, all the sets in this group have element e and none don't"] and the final groups will each have exactly one set [you can't have two or more sets where each set have the same selection of elements] and you will have $2^n$ groups. Other people don't like it as it "works backwards".)