> In my experience non-westerners tend to underestimate the level of spiciness that westerners can handle

As someone who owned a restaurant; that is not it most likely. The problem is that people say ‘super spicy!!!’ (or bloody if it is a steak) and then send it back because they find it inedible. And you do not want to cause a scene nor can you bite back too hard, so you just replace it with bland and overcooked. It is a shame but many places just want to prevent that issue.