What's Etch Primer for?

Etch primer is for getting paint to stick to alloy.

You could always use some feronite to undercoat your steel, which is an oxide convertor, to stop the rust.

You are right it does 'scratch' in one sense.

Etch primer creates microscopic pits on the surface of the metal which allows the primer to 'key' onto metal surfaces, especially alloys and galvanised type surfaces. This primer then allows the next coat to 'key' to the primer so basically it gives you :

metal -etched primer keyed to metal - top coat keyed to primer.

If you try to paint directly onto some metals the paint will peel off much quicker if you dont use an etch primer.