I would be fine with beating average but as soon as this thing kills someone, I want there to be a significant difference in accident rate so it does not end up in regulatory hell.

I think from a statistical standpoint, beating average is great. But the big difference is that we have this odd and fundamental requirement for justice/punishment in our society that gets lost with self-driving cars.

If a human driver kills someone / injures someone / damages property, people get satisfaction or resolution when the human is punished - insurance increases, license points, jail, etc.

But when a self-driving car - even if it's better-than-average - does something wrong, there's nobody to punish and no retribution to exact, so people will be left feeling unsatisfied. That's why the bar is going to need to be so much higher.

There's also the bias (accurate or not) of "most people are bad drivers, but I'm better". Beating the average only beats the average. It improves things across the board (and that's awesome), but people who are particularly careful or skilled will balk until it's perceived as better than they are.

Pick something you pay extra attention to. Now imagine being informed you can't do that any more, you have to take what [this robot] does for you. Also remember all the terrible UI changes in software that have been done for a majority instead of your use-case.

Reluctance until it's substantially better seems reasonable to me. Somewhat unfortunate on a species level, but not for many individuals.