It might be complicated.

It is indeed unregulated and often blinding. But there is also no one limited use case as it can be for car lights:

- these lights are sold internationally so they don't assume one specific country in the first place

- it's not just for road use, people will use them in rougher bike paths where there might be absolutely no other light.

- seeing the path forward isn't often enough. You don't have a windshield nor can assume a cleared path, so knowing what's at head level can also be crucial. Even on dedicated bike paths there will be branches and unmaintained/unexpected bits that need avoiding.

- being seen can be as important as seeing yourself, and often back lights are small and a pain to recharge. Many customers will want a wide spread front light that reflect all around, even if it mean charging it more often etc.

All in all, it might be that biking itself is wholly unregulated so lights will have a hard time being single purpose and regulated as well.

That seems like an intentional design choice as truly unregulated LEDs without even ballast resistors will burn out.

It's probably this way because companies design products to cater to their customers, who would likely prefer a Damn Bright Light to feel like they got their money's worth.

It's not a brightness thing, after all car headlights are probably 1000x brighter than anything you may have on your bike.

It's because 99% of bike lights are basically just flashlights, spraying light everywhere. The solution is the same as for cars — lights with horizontal cut-offs.

Probably depends on jurisdiction. E.g. in the UK there is no formal limit (and car headlights are more powerful than bikes') but light must not dazzle or cause glare to other road users, hence why headlights on full beam must only be used in certain circumstances, and beams in general must have specific orientation.

So if you are blinded by an incoming cyclist this is not legal... of course enforcement is another matter.