"If small cars are dangerous, wouldn't we expect to see this in accident stastics from someplace like Japan?"
I don't know enough about Japanese roadways or traffic habits to comment.   I only know what is true for my own neck of the woods--in this case rural and small city USA. 
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"In a collision with another vehicle, large vehicles gain an advantage mainly by bringing a lot more inertia and kinetic energy, thereby making the magnitude of any collision much more severe. I fail to see how that is a good thing."
Yeah the bigger vehicle protects its occupants mainly by using the smaller vehicle as its personal deceleration zone.  Whether it's a good thing or not depends on which car you're in  
 
 Unfortunately for you Funked, you'll likely be the guy in the smaller car being used as a crumple zone so I can see why you wouldn't be too thrilled with the prospect.   
You actually make excellent recommendations FUNKED---but now the problem of economics rears its ugly head.  Most of us don't have the cash to blow on building something like that.  If I had the cash to built a full roll cage into my car...you better believe I would.
J_A_B