The idea is that car manufacturers would be able to undercut dealerships on prices and thus bankrupt the dealerships[1].
So it's just classic protectionism. The question why the law should protect entities that everyone hates is the baffling part.
But certainly I don't see why a manufacturer who doesn't have an existing dealer network shouldn't be able to sell in whatever way it chooses.
It's not - it's probably better than your average Dodge dealership, but there's nothing inherently different about BMW dealers - they make their money on services and accessories that you don't need like most other dealerships. They'll overcharge you for an oil change (which is typically cheaper, but not much, at an indie mechanic - but it's irrelevant because changing a BMW's oil is so so simple your grandmother can do it) like any other place, but they might offer you some muffins while you wait in the lobby. BMWNA (BMW's North American operations) will keep the dealerships in line if they start watering down the brand value, but you usually have to go through a long and arduous complaint process to get them listening.
At this point; the dealers know that you know what the invoice price or KBB value of a car is, and what kind of loan rate you can get elsewhere. They might want to sell you a warranty or the like, but at that point you've already negotiated the price of the car, know your loan rate, and can just say no to the extras and move on.
I'm not sure about "everyone hates dealers", but having never purchased a car, I have no idea why a car store is different from a computer store. What's special about dealerships?