As a french, it is not muddling that I want but reasoning.
Huh I never noticed this peculiarity of English before. "I am an Italian/Australian/Canadian" - fine. "I am an English/French/Swedish" - hell no. Traditionally you'd say Frenchman, nowadays you'd avoid the gender and use "I am French" directly as an adjective.
Anyone know why -an words can be used as a noun and -sh words can't?
The English language readily makes adjectives from nouns, but not the other way round. Nominalized adjectives are used for collective groups at most (which is why you can say "the French") but rarely become regular nouns.
What is the point of having such confusion?
Also, why having dictionaries at all? And who decides which one is right?
Why not have a body made up of experts who make that decisions once and for all when natural evolution leads to bad results?
Exactly the opposite of why you think we have them, apparently. In English-speaking countries, dictionaries document existing usage, they don’t try to influence it. No modern dictionary has any opinion on what usage is “correct”, and you can find a lot of extremely non-standard things in the most prestigious dictionaries.