Are we?
I'm not sure how they deliver more power in this specification. But traditionally, the additional power (from 5W to 20W to 100W) was through additional *voltage*, not current.
> And it's not something trivial that power supplies and phones can detect, there is not a way to determinate the voltage drop in the cable built into the standard (basically all they needed to do was to add a voltage sensing pin on the connector, to be shorted with VCC at the load side, so the power supply could sense the voltage at the other side and determinate if there too much drop, but as far as I know it doesn't have it).
Surely we just set a current-limit, written into the specification. Then we choose AWG wires / connectors as appropriate to support that current.
Voltage can't go up arbitrarily, but voltage can safely be increased to ~48V or so in most applications. After 48V, humans start to get shocked / hurt, so that's probably the reasonable limit.
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And I'm pretty sure you can sense the voltage drop across a cable. USB-3 delivers 5V by default, and then you send protocol commands to increase your voltage to 12V or whatever. If you detect that the power-supply is only supplying 11V (after the 12V command), then its either a PSU-error or a cable-error. And I'm not sure if it even matters which is which (either way, you're not getting enough power, so your device needs to probably shut off)
You can then disconnect / reset your device and maybe stick to 5V default specs.