The detached third-person perspective used by Hemingway in "Soldier's Home" is entirely appropriate given the story's subject matter. What Hemingway wants to convey is the sense of detachment that Krebs feels from both ordinary life and the people he grew up with as the result of his traumatic experiences of life at the front.
Krebs's wartime service has alienated himself from humanity as a whole—and, in particular, that portion of humanity that resides in his hometown. Not only that, but Krebs has become alienated from himself. He no longer knows who he is and what he really wants out of life. This is where the limited third-person perspective comes into its own; just as Krebs doesn't know who he is anymore, neither does the narrator, and by extension, the reader. Krebs is a mystery to himself, to others, and to us as readers.
Given what we know about Krebs, it is imperative that Hemingway adopts the perspective he does. He wants to give us some idea as to what's going on inside...
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