This is because of two things: (1) fetishization of size, weight, speed. This is modernism, a monomaniacal obsession with measurements, a very infantile mindset. (2) self-preservation; People are more inclined to buy bigger vehicles when they are surrounded by oversized death machines anyway.

It's a textbook tragedy of the commons. This can never resolve positively in a bottom-up manner. It's a local maximum that will require top down intervention, or some serious soul searching.