Because a car is a life critical system and nobody should want an automated vehicle, even if controlled by a human, to "accidentally" try to run over some humans. I doubt the pilot's ability to stop all missteps before an injury.
The car should be much safer before it goes on the road, regardless of test status. This was a near miss and should be taken extremely seriously by highway safety regulators.
>Or have we truly reached the point now where we expect "stable" software to be of the same calibre as beta software so nobody makes a distinction between the two?
I expect every vehicle on the road to meet a safety standard. I do not accept "beta software" tests on public roads if this is the kind of mistake they can make.