Like the iPhone for example? Or maybe the Porsche 911 GT3 RS? Markets have a lot of segments. Government should regulate the minimum absolute necessity. Like seatbelts... who were ironically a market invention/idea first.
Sure, and precisely what the "minimum necessary" entails is up for debate. The EU just believes that minimum to be higher than you do.
My personal opinion on this is that the minimum should protect me from others. This doesn't even include seatbelts I gave as example because I can (realistically) only hurt myself. This would include gas emissions, noise limits, headlight angle/strength rules, ... Certainly not the dashboard layout.