I'm on my third Tesla. FSD on highways has improved so much in the last 6 years. On my first Tesla, autopilot would regularly try to kill you by running you into a gore point or median (literally once per trip on my usual commute). I now can't even remember the last time I had an issue on the highway.

Anywhere else is basically a parlor trick. Yes, it sorta works, a lot of the time, but you have to monitor it so closely that it isn't really beneficial. As you point out, its going to take some serious advances (which in all likelihood are 30+ years away) for FSD to reliably work in city centers.

I think the issue you've highlighted is one of governance. There's only so much Tesla can do regarding highways. You really need the government to step in to mandate coordination of the type I think you're envisioning. And the government is pretty much guaranteed to fuck it up and adopt some dumb standard that kills all innovation after about 6 months, so it never actually becomes usable.

I think automakers will eventually figure this out themselves. As you say, there are too many benefits for this not to happen organically. Once vehicles can talk to each other, everything will change.