However, even illegal e-bikes (or unregistered e-motorbikes to be more accurate) are preferable in my view to the problems associated with car traffic. At least when an e-bike rider does something stupid and crashes, they will typically end up hurting themselves which can be an important learning moment. Car drivers don't have the same "skin-in-the-game" to ensure that they're paying attention.

It's harm reduction - let's encourage the most irresponsible car drivers to be irresponsible e-bike (legal or not) riders and we should end up with far less congestion, pollution and collisions.

> And because they're not a regulated vehicle, nobody has third party insurance.

At least here in Germany, assuming it's not a tuned bike, it's covered by your regular liability insurance.

In the US at least, I'm not sure what "regular liability insurance" means. Might be something on a homeowner's policy and something on auto insurance but it's probably not something the average person necessarily has.