Given that this is a fairly common sentiment, it’s a bit wild to me that SpaceX uses touch screens to control almost everything in their Dragon capsule.

It's a different environment. Astronauts are passengers, not drivers, and they rarely need to make sudden actions while multi-tasking the way car drivers do. If they made all-glass cockpits for fighter jets I would agree with you, but they don't.

This isn’t a very accurate take, anymore than an airline pilot is a passenger. There’s an reason why the first astronauts to fly in it were military pilots. Dragon has a manual mode that requires an astronaut to control the vehicle for safety reasons. I’m not aware of any human-rated NASA software that doesn’t also require a human in the loop to meet the required safety thresholds.