I think as we learn more about car safety, it only makes sense to apply that knowledge to saving lives/reducing injuries. Remember, there was a time when cars didn't have seat belts, let alone shoulder belts!
I feel that in many cases, the roads are more dangerous today. Drivers have far more distractions (cell phone, Blackberry, navigation, CDs, iPod, etc.), and I think that's the biggest factor in general safety. Our vehicles in general are far more safe than they have been historically, but I think drivers take the task of driving much less seriously.
To your bike example, I used to bike to work on public roads about 15 years ago. I would never do it now, due to all the driver's distractions listed above. I did wear a helmet, 
and on at least two occassions it prevented a serious head injury.
I agree that the things that are done in the name of safety can seem ridiculous at times, but if it saves someone's live or prevents serious injuries, then in my book it's probably worth it. Especially for a child, who might not have all the information to make a smart decision on their own.
