I think you missed the point. You said, who cares about wreaking it is virtual not reality. No one gets hurt. BUT, as people have said, they like to rest their hands on the wheel in such a way that when they get rammed unexpectedly, the forcefeed back can BREAK FINGERS. I don't know about you...but I would think that hurts.
Plus, having everyone turn into a ghost at the end of a race isn't real, and takes away from the immersion we all like from LFS.
Lastly, you said to have everyone spectate soon as they finish race, but the whole issue is that people try to test their setups or learn the track, and then get wreak by some idiot. Testing setups would be impossible if everyone was spectated.