The terrible PWM drivers add another downside - At the frequencies in question the peaks are long enough to increase the retina-stabbing factor much higher than the average brightness, even if they're not long enough to cause noticable strobing. Smoothing capacitors as an aftermarket QOL option is a market that needs to exist.
However, poor (or nonexistent) light source shrouding is also a common factor. Bicycle headlights make a great lower-powered example. Cheap bicycle headlights throw much less light than a car headlight but are painfully blinding due to the exposed light source point. Bicycle headlights that meet StVZO regulations shroud the light source, have decent optical design, are far more effective as headlights, and don't make anyones eyes bleed even when they're flashing.
Early composite car headlights (post sealed beam) received significant design investment involving established headlight manufacturers and worked extremely well. Auto manufacturers brought headlight design in-house by the time xenon and HID headlights showed up in general use; inexperience and cost avoidance gave those lights an undeserved reputation. A lack of regulatory outcomes rewarded that strategy, leading even established composite headlight quality to decline. Light source shrouds disappeared or became ineffective due to poor reflector design.
Headlights on new cars in the US market have declined to the point that they're effectively overpowered cheap bicycle headlights plus extra PWM induced stabbiness, while costing orders of magnitude more as a result of cost cutting. The worst have returned to sealed beam levels of utility, but at least there were aftermarket options to improve sealed beams. Modern aftermarket lights are so bad that it's normal for drivers to install them for malice against other drivers with blinding stock headlights. There really aren't any optically well designed headlights on the US market any more, except for bicycles.