Would cameras inside the car have really helped in that instance? I know most of the interesting work that has ever been done on a car for me would have been impossible to see with a dashcam.

I could see the value of being able to see someone working on your car, but only in the situation where it was explicitly agreed to beforehand. A) the employee has privacy rights, and B) if you really wanted footage that helped, you'd need to have cameras setup outside of the car, which would require help from the car shop.

I can't imagine wanting to be a mechanic in a shop that recorded me for the customers (I assume that there are cameras in place for security anyway). But I could see this being a real differentiator for a new auto shop -- You can trust us - you can watch us work on your car!