While the engine can handle it, that's generally not the issue with towing anymore. Like you said, todays engines are powerful. It's the rest of the car that needs to be beefed up for towing. Particularly the transmission and breaks.
My 4-runner had plenty of power to tow my boat, but over time the wear and tear on the rest of the vehicle would destroy a perfectly good car. I now have a Tundra that is build to pull the load. FYI, my boat ready to fish plus trailer is ~7k pounds.
To the original poster wondering why people want such big cars. Personally I would love a smaller car, but I enjoy my boat more :)
Second, there are more issues than power. Towing 1500lbs behind a Corolla puts a lot of strain on the car that it wasn't particularly meant to handle on anything other than an occasional basis, especially with things like automatic transmissions. Also very important, a Corolla is 2700lbs. 1500lbs of trailer starts to get sketchy, and the trailer can start yanking around the tow vehicle.
Edit: yes, you are right, lake fishing in a rowboat, you don't need a dedicated tow vehicle. Thing is, people dream they will get that 22' boat in a few years, so they buy the F-650 or whatever.
Anyway, sure there are limits, but a nice 14 foot boat at 1,000lb plus 500lb for the trailer is still a decent boat IMO.
Granted if, you want to pull a 22' boat that's another story. But, for lake fishing it's fine.