Actually, the economics of it all is what I find the most distasteful. (see below)
...the capability of engineering technology to mass-produce vehicles that can deal with trade-offs like differences in local conditions, whether political or technical.
I don't question their ability to comply with whatever crazy regulations is imposed.
I do question how long they will remain in business when those regulations are causing productivity to decline at such a rapid pace.
Think about all the time and money spent in this arena. The legislators making up laws. The bureacrats enforcing them. The Corporate lawyers trying to understand them. The engineers trying to figure out how to comply. The consumer having to modify their vehicles every time they move from one state to another. Etc. etc. etc.
And what does any of that produce? Did it actually increase the productivity (e.g. reduce cost or time for transport of thing/person from point A to point B)? In a world market, it's just tying our hands behind our backs and shooting both our feet. And for what? Global warming?
The two cases have absolutely nothing to do with each other. Really, you don't get what I said at all.
I don't question their ability to comply with whatever crazy regulations is imposed.
What constitutes crazy? You still haven't answered the charge that you are reserving the prerogative to decide what constitutes "makes sense." Nor are you technically competent to do so. Is it positive crankcase ventilation? Is it exhaust gas recirculation? Is it air injection? Is it multiport direct injection?
That's not the point any more. Every car manufacturer in the world has the ability to do every one of those technologies. They have the ability to make cars that get better mileage, more power, less emissions of whatever type the customer thinks important. Hell, they can even give you a car that can manage all of those trade-offs. That's existing technology.
The point is, they can do that without changing the car at all, and vary the relative degree of emphasis by local market preference, all in software. IOW, the car doesn't have to be different to respect local preferences.
What you haven't considered is a community's desire to market their air quality versus roads with 100mph speed limits, etc. because you want one standard nationwide.
Why? Cars today are made to order, not to forecast. The entire bill of material is then generated and delivery forecasts updated. That's what JIT is all about. It is not analogous to the gasoline market, which is far more sensitive to delivery and inventory costs. The belief that a national standard is the only technically and economically feasible option is simply no longer true because the WIP and supply chain are so much more flexible.
In any case, a national standard is effectively a democratic majority using a government agent to design cars, something I know for certain you don't want.