I suspect that stop signs serve an additional purpose, of calming traffic in neighborhoods. Long stretches where car drivers don't expect to slow down, will increase overall speeds. This is already evident on long neighborhood streets that don't have stop signs, and where they are now installing speed bumps at the request of residents.

Perhaps not a planned benefit, but the inconvenience of stop signs also funnels car traffic onto the larger trunk roads, leaving the side streets for cyclists -- a cheap and cheerful way of separating car and bike traffic.

On the other hand, I suspect that stop signs are also just a cheap traffic control device that works with minimal case-by-case design, especially in neighborhoods with narrow streets. Alternatives, such as roundabouts, tend to involve complete re-design of an area with at least a 50 yard radius, for instance eliminating visual obstacles and parked cars.