Maybe the driving instructor wanted to impress upon you the importance of respecting the STOP sign with this story? Maybe it's true in some cases, but somehow I can't imagine that at an intersection with very bad visibility the traffic planners just say "let's start with only a Give Way sign and see how many accidents happen, if it's too bad we can always replace it with a STOP sign"?

It's true however that some countries are more prone to what I call "traffic restrictions overshoot" then others - e.g. in Italy there are many stretches of highway limited to 50 km/h, apparently in hopes that drivers will at least reduce their speed to 70-80 km/h, and many STOP signs hoping that drivers will at least slow down at the intersection.