If urban streets and street regulations were be modified to keep speeds under 30 km/h at all times and remove most of the SUV-type vehicles, small cars with less safety gear could be practical and safe for urban driving.

Unfortunately the size/speed arms race in cars has left streets extremely dangerous for pedestrians, cyclists, and anyone who isn’t driving something weighing 1500+ kg.

Perhaps if vehicle manufacturers/vendors were made partially liable for anyone injured in collisions involving their vehicles it would provide some pressure in the right direction.

I have little sympathy for the death toll routinely inflicted by distracted drivers of two-ton rolling fortresses upon those who leave the house without donning a tank. All those crumple zones are only helping the occupants. It's a form of violence once you start taking risk compensation into account. Personally I wouldn't mind it at all if drivers were a little more on the hook for the dangers they create.

(and why did you think a rightsized car would forego seatbelts and had restraints?)

Who said a modern day utilitarian small car shouldn't have modern safety features?

If you look at the "supermini" class cars in NCAP, there are several 5 star cars. Sure they are heavy (~1000-1300kg), but they also represent great potential for improvement if one were to re-think this category.

Right now the technologies that make sports cars and race cars lighter and stronger are expensive. Because composites are hard to manufacture cheaply. What if we were to invest in lowering the cost of cars made from composites? By improving process, by developing new design strategies and by focus on volume?

(As for "impossible": a decade ago, most current Tesla owners wouldn't have dreamt of there being a desirable electrical car. Much less one they themselves would own)

Suzuki has been making lighter cars like Swift, Ignis outside US.