I think this understates the safety regulations for automobiles by quite a bit. Maybe there's an example of an industry which makes lightly regulated, dangerous products, but I don't think cars are it.
Asking why the government should allow an EpiPen competitor with a 0.1% higher failure rate is akin to asking why the government should allow people to purchase small, cheap cars.
I don't think that's true. Certainly expensive cars have new safety features, but ...
I read a study of empirical data on what, in practice, made cars more survivable in accidents. It was awhile ago but here is my vague memory:
The data was hard to analyze - they were trying to untangle cause and effect from wrecks - but the conclusion was that the most important factor was the relative location of hard points: If their hard point (e.g., bumper) lines up with your soft spot (e.g., driver-side door/window), it's bad for you. That's something that doesn't depend on cost.
Otherwise, I would assume safety depends heavily on weight and structural integrity, and certainly some cheaper vehicles, such as pickup trucks, would be much safer by those measures than much more expensive sedans.
It also might depend on center of gravity, roll-over potential, breaking ability, etc.
Cars aren't designed for the safety of anyone but their occupants, though.
This is not the case. Part of the reason that all new cars from large manufacturers are as bulky looking as they are is to conform with US pedestrian collision regulations.
While I applaud this initiative, I'd like to be able to buy a smaller, nimbler car and simply avoid hitting pedestrians.