If you want to do something like request interception, you have to point your front-end at a proxy server and mock things there. If you want to test a file upload, you have to simulate typing into the dialog and then use a literal file on the disk. It's just pointless friction for most testing setups.
It's not that E2E testing is bad, it's that in some projects there's room for a Selenium-style tool across the entire spectrum from E2E testing to unit testing; particularly if I'm testing something like D3 code, or parts of a CSS layout.
It's all doable, it's just that Selenium makes it all needlessly difficult, because its point-of-view is that your front-end should be treated mostly like a black box, and that any mocking that does exist should be happening via endpoints and application connectors.
I like Selenium -- I prefer using an Open protocol over Puppeteer. I just feel like that protocol could use a lot more design work.
If you're building a SPA, you can mock out the backend and control the backend mock behaviour in your Selenium test.