That only works if the vehicle in front of you is lower than your own, right? So people will have to get into an arms race and buy higher and higher vehicles to keep that advantage.

True, but that's mitigated by other factors, the simplest of which is that above a certain height it will become a royal pain to get in and out of the vehicle (and not just yourself: that includes helping kids in the backseat, and baggage).

And I've avoided accidents by looking through the rear window of the car ahead of me.

This is the reality. You also get cut off way less and that alone avoids plenty of accidents.

I drive a fair bit, and I'm here to tell you:

The type of person who cuts another driver off does not do a lot of thinking about the relative consequences. I've seen plenty of tiny sedans with oversized tailpipes, wings and a dozen mod stickers cutting off big SUVs.

Heck, they even dart in front of semis on the highway. They do not care if you're in an XC 90 instead of an S60.