A culture of safety is not a "big problem" IMO. The "big problem" is that a vehicle at 120mph requires an insane stopping distance.
On dry asphalt:
* 60mph: 172 ft * 120mph: 688 ft
[1] http://forensicdynamics.com/stopping-braking-distance-calcul...
https://www.consumerreports.org/car-safety/best-car-safety-p...
So, take a sporty car with twice the braking performance of a basic car, and you can go 1.44x as fast as the basic car while still having the same stopping distance.
I have a very light car that I use on the track, with an amazing amount of braking for its weight. Full deceleration happens at 2.5g, that's not pleasant. There are also comfort limits here.
https://fastestlaps.com/lists/top-quickest-stoppers-60mph
That's a pretty good performance (but it's a $100K car), but at 200 km/hr, the stopping distance of the M5 increase to 124m (which makes sense since a 200 km/h car has 4X the kinetic energy of a 100 km/h car)
Once out of the specialty racing cars, all of the cars "faster stoppers" list took about 27m-30m to stop from 100 km/h so that seems about the best that can be achieved today.
German cars are feel AMAZING at high speeds. They're not the only ones, but dollar for dollar its easier to take a German car to 120 than any other nationality. Why? Because they're made to be driven on the Autobahn. They are, all else equal, safer to drive at high speed than American or Japanese cars because Germany has a stronger culture and laws around allowing cars to drive fast.
As we add assistive tech, it becomes safer to take cars this fast. Of course, there's a lot of other things to solve; roads, adoption, etc. And we can't solve the physics of stopping and impact force. But the benefits might outweigh the costs.
But Volvo, if we take them at their word, is saying "we don't care. This is as fast as you can go. Enjoy."
And sure, maybe their speed limit is fast enough. But, really, this move is just posturing. The tangible effect that it will have on vehicle safety likely won't be large; at best, it might stop some dumb kids from taking their dad's car out for a joyride and driving it off a bridge at 130, but its not going to stop them from doing the exact same thing at 100, or even 60 (on some backroads that speed is just as deadly).
When they limit their top speed, what they're also quietly saying "these cars are only engineered to go this fast". That engineering is why German cars are so great to drive in the triple digits. Its not just the platform; Volvo has computerized assistive tech. Is it tested to actually work at triple digits? Probably. Now that they have a corporate-wide mandated speed limit, will they continue to develop and test it at triple digits? I don't know.
And that's the real disappointment. We're now just "alright" with the speed we've always been driving. Cars could become "personal bullet trains". With enough assistive tech, give certified models their own barriered lane and, if the weather conditions permit, let them go 140. But Volvo isn't interested in that future, and that's very sad indeed.
If so, I don't think automotive performance and lack of "smooth feel" at high speed are the things governing our speed limits.
We should be celebrating companies which push the limits of assistive technology to make high speeds safer; this can only be done by companies who optimize around high speeds and have cars on the road gathering data at high speed. This conclusion is evidenced by the fact that similarly priced German and Japanese/American cars drive totally differently at high speeds, because German cars are designed to run at high speeds. The environment and corporate policy matters, a lot.
The reason our speed limits in America are generally low isn't really because of road feel or reliability at speed or any of that. Its more complex. But one step in a positive direction is definitely having more cars on the road with companies behind them who say "the cameras on this thing? they can detect a stopped car 300 meters out and take progressive action without any human intervention." Over time, we might see change. Or not. But that's a necessary factor.
On the other hand, Volvo is saying "don't drive faster than 112mph! that's dangerous, no one should ever do that and we'll never support it on our consumer cars" which is regressive. We can do better; we just need people and companies to Want to.
German drivers are simply not like American drivers. American drivers have almost no training at all, and certainly don't have the training or discipline necessary to drive at Autobahn speeds. American drivers can't even practice proper lane etiquette (staying right except to pass), and really don't understand it.
The last thing American roads need is any assumption that American drivers are remotely like German drivers in ability.
Remember, in America, almost everyone drives because there's no public transit in most places, and even where it exists, it's kinda lousy at best. In Germany, it's perfectly possible to get around without a car, unless you're going to small villages or towns or rural places. Because of this, not all Germans drive! It costs a lot of money to get the private training required to obtain a license there, and driver testing is strict. None of this is true in America.
Finally, if you want bullet trains, build bullet trains. Bullet trains are very safe at speed because they're on rails, and are maintained by professionals on a strict schedule. You don't get that with privately-owned vehicles. And cars are horrifically bad for pollution and fuel economy compared to trains when operating at high speeds. We're spewing way too much carbon into the atmosphere as it is. If you want to move people around faster, you need to build the proper infrastructure for this, like the Japanese have with the Shinkansen.
That means good road maintenance, no abrupt turns, properly protecting access (even from wild life, which can mean underpass for big animals), easy way out for people to go slow if they feel it won’t do it for them, frequent info panels in case anything happens.
Of course for all of that there needs to be an underlying safety culture.
Too bad no such roads exist, not even the Autobahn (warning, graphic photos):
http://www.montanaoutdoor.com/2013/10/deer-disintegrates-on-...
And not even race tracks are guaranteed to be animal-free:
https://en.wikipedia.org/wiki/Cristiano_da_Matta#Collision_w...
If you prefer starting from accident statistics, here are a variety of studies across a variety of locations that generally show a ~2% increase in accidents per 1 km/h of speed. [1]
[1] https://ec.europa.eu/transport/road_safety/specialist/knowle...