They want them to engineer everything except the things that replace driver skill.

I think it's been a long time since any motor racing was just about engineering the best possible car. The problem is that engineering got too good - the best possible car we could make would simply be far too fast to be safe. So F1 (and all motor racing) are always playing the rules to try and keep an even field (otherwise the best funded teams would be leagues ahead) and to stop the engineers from killing the drivers.

> I thought as an outsider to the sport that F1 was all about engineering the best possible car and putting the best possible driver in the seat

The clue is sort of in the name; you make the best car within the "Formula", that's why its called "Formula One". The "Formula" is essentially the set of rules that sets constraints on what you can and can't build. You build the best possible car within the Formula. It's "One" because it's meant to be the pinnacle of single seat racing. It's been roughly this way since WWII.

One of the oldest rules in F1 is that the driver must drive the car alone and unaided. That's been explained as no traction control, ESC, ABS brakes etc. etc.; Teams kept cheating so the only good way to prevent this was to standardize the ECUs.