I agree that the cutoff by year is somewhat arbitrary, though SUVs have never been popular around here, with gas being so expensive; right now, it's at ~1.36€/liter (aprox $5.67/gallon), while our median salary is less than $1600/month.

Emissions standards get more strict each year, so it's not arbitrary at all. As technology advances, emissions systems get more advanced and ten years makes a world of difference. A 1995 Honda might be legally allowed to spew 1000x the amount of NOx that a 2005 Tahoe can. So a newer car could be much cleaner than an old one, even with a 3x larger engine.

This is also completely ignoring the fact that older engines are more likely to have various parts of their engine and emission systems degrade over time, reducing their effectiveness.