With injection engines this simply isn't true any more.
> made a big mistake by adopting diesel
The small injection turbo diesel engines offered much higher efficiency and thus much lower CO2 emissions (~half) compared to contemporary gasoline engines (they still do). Other parts of the emissions profile (e.g. NOx) have almost exclusively to do with how efficient the engine is run, e.g. gas engines that are close to efficiency to diesel engines will produce similar amounts of NOx.
Broadly speaking, as more aspects of the combustion are externally, forcibly controlled, differences between diesel and gas engines become a lot less.
(The average German car has a 1.6 liter three or four cylinder engine doing something like 4.5l/100km ~ 50 mpg; basically no one is driving big cars with six or eight cylinder engines).
https://www.politico.eu/article/europe-looks-to-electric-car...
This suggests that prior to Euro 6c, some petrol engines were getting away with higher particulate emissions than would have been allowed for diesels.
As you said, the high efficiency gasoline engines generate more NOx and particulates, but these engines cannot pass a CARB smog test. Most cars have separate US vs EU specs, (or simply aren't available in one market) and the EU specs always have better power and gas milage. For instance, the 1.0L engine in my 2014 Ford Fiesta is rated for 123hp, but the same 1.0L engine in the 2014 EU spec Ford Fiesta gets 140. (EPA vs EU gas milage ratings aren't directly comparable) This is a direct result of the fact that the US version runs at a lower temperature, which necessarily results in lower power and efficiency, but also results in less NOx.
Incidentally, this is a large part of why the US response to the VW emissions scandal was so different than the EU response. The affected VW engines broke EU regulations by a little, but broke CARB regulations by a lot. It's like going 70mph in a 55mph zone vs a 35mph zone.
We had some Dutch friends visiting when the scandal broke. Their BIG concern was the emissions tax they paid to register the car for the road -- whether they would need to pay back-fees, and an increase in tax for future registration.
Your core theoretical claims may be true, but this specific example was not the fact revealed by the emissions scandal. VW had to cheat on NOx emissions numbers to get their diesel engines to match gasoline efficiency and performance.
The SCR system is an after-treatment for exhaust gasses and does not significantly affect fuel economy or performance.
Gasoline vs diesel feels a bit like fructose syrup vs table sugar, it's pretty clear in both the US and Europe that regulations have not kept up enough of a downward slope on emissions to prevent technological advancement from going into grotesque growths like the SUV instead of cleaning up the exhaust and reducing consumption further.
Personally, I don't believe my life is quite worth the money I'd have saved by driving a small sedan instead of the larger vehicle I drive.
(If it were, then I daresay my budget would be severely lopsided. Seriously; what kind of idiot would I have to be to spend more than 70% of my net income to car-related expenses?)
This reasoning reminds me of the tragedy of the commons.
You bet I need some fancy footwork to avoid being forcibly detoured. And you bet that once I'm in the correct lane, I make a point of emulating the people far in front of me, by almost-tailgating the person directly in front of me.
The semi-worst-case planning delusion is why we have convoys of 2.5 tonne SUVs doing the school run with two kids each. There doesn't seem to be any way to end the constant vehicle size escalation other than through legislation.
SUVs are at the upper limit of what most people are willing to tolerate in terms of unmaneuverability. Too big a vehicle, and you have trouble passing and weaving through the shitty commute traffic.
And if you try, and the vehicle is too slow for what you're doing, you'll probably crash. So it's a balance between being more survivable and being less likely to crash in the first place.
Also, bigger vehicles tend to be more expensive, non-size-related factors held equal.
a) once a few were on the roads, you couldn't see the traffic ahead, unless you were also in an SUV which then allowed you to see through the front and rear windshield of the SUV ahead, and
b) stupid airbag regulations (you couldn't disable the passenger side airbag) meant that mothers couldn't put an infant in the front seat, because if the airbag went off it could crush the baby. Thus SUVs became more popular for use by mothers with children.