> ... we're not talking about what's more common, but about how recent regulatory changes affected car design.
Well, no. You said that cars are larger because of safety regulations.
But the obvious rebuttal to this is that larger cars have been trending upward for decades, and the most obvious proof of this is the decline of the sedan in favor of the SUV.
> You can look up luxury models of mid or late 90s cars, and they had all those features. Now look at the same models today.
These were larger cars than the average as well. The 90s Mercedes E-Class doors were significantly larger and heavier than the ones in a Toyota Camry.
A current generation Mercedes E-Class is also larger than the one from 30 years ago, mostly because it has gone through a significant increase in interior space. Again, this is not something only Mercedes has done to their line, all automakers have gone down the same route.
> If you wanted to make a car with the same outside dimensions today you could barely cram two people in it, due to all the mandatory crumple zones etc.
That car is roughly the same size of a Volkswagen Polo, which fits 4 people, and holds pretty much the same volume in the trunk. The Polo has an five star EURONCAP rating. Hell, even the SMART Fortwo is a pretty safe car, and it's mostly plastic.
Yes, small cars exist and are safe too, but people just like larger cars better.