Another argument I have heard in relation to it was in relation to the stab in the back myth.
In 1918, Germany was on the brink of collapse: the economic blockade caused great sufferings, its allies were beginning to falter, and the USA was pouring more and more men on the field. The last Spring offensives, designed to deliver a decisive victory, had failed to do so.
So they accepted an armistice, retreated from France and interned the fleet at Scapa Flow, under British control. There was a negotiated peace, but the allied conditions were pretty harsh.
Now, some people (principally in the military) did not take it well1. After all, certainly the German Army had lost territory towards the allies and had suffered severe defeats, but there was still a German Army, there had been no "decisive battle" to take it out and Germany itself was still free of enemy forces. To them, signing the armistice was an error because they though that the war could still be won or, at least, a better treaty negotiated while the Army was still in France and Belgium.
This developed into the "stab in the back myth", that the Army had been betrayed by the civilian government2. It also allowed for the more militaristic faction to claim that Germany could have won the war and that Germany should try to recover the lost territories by military action.
Now, some claim3 that an objective of unconditional surrender was avoid a repeat of that: Germany defeat had to be absolute, to eliminate any possibility of anybody defending the German policies that led to the start of the war.
And of course, it allowed those who had been in favor of starting the war a way to blame others from its result.
2The Nazis would later use it to single out Jewish and leftists as responsible for their defeat.
3See the Wikipedia page.