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You're correct that 'peace without victory' was an utterly unworkable ambition, but compounding this sin the US then largely acted to undermine attempts to enforce German debts at the same time it called in the debts owed to the US by its allies. Part of this was buying too much into Keynes' doomsaying book, and part was early cold war posturing and power balancing, but at the end of the day Versailles was hardly excessive or vindictive and it was eminently reasonable that France should seek reparations having borne all the destruction while the war's loser got off comparatively lightly. It was modest compared to the treaty of Brest-Litovsk Germany had enforced on Russia the year prior (german gains in land and population here far outstripped what they lost in Versailles) , and should be seen partly in reaction to the 3B franc indemnity imposed by Germany on France in 1871. Per Stephen Shuker, it's likely Germany ended up paying no net reparations at all, having paid its immediate bills with American loans that were subsequently defaulted on in the Great Recession. Contra Keynes, who believed that Germany could not afford the ~2B marks per year for 30 years, Mantoux estimated German rearmament spending as exceeding that seven times over for each each year between 1933 and 1939.
Sally Marks' Myths of Reparations identifies two main failures in the allied prosecution of Versailles. The first was enforcement as you mention, but the second was the failure to make it clear to the German people (who again, had lost a colossal war escaping most of the destruction) the psychological reality of their defeat: “An Allied march down the Unter den Linden would have humiliated Germany briefly, but in retrospect that might have been a small price to pay”.
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