I prefer the simple install method compared to other games (or sims, whatever you wanna call them). Means I can keep it on my archive drive, and if I for any reason have to reformat and install Windows, I can just create a new shortcut, unlock my licence again, and its all ready to go.
Let me ask you this, if you had to reinstall LFS every time you reinstalled windows, or got a new HD or whatever, would you prefer to backup and then move accross all the skins, setups, config file etc seperately, or would you rather just move the whole folder?
For your other points..damage exists, it could be better but as has been said the current implimentation is a quick one to get the job done. Go bounce off a few curbs at South City in the LX4 for 5 mins, you'll see it working.
Your definately looking at it from the wrong side. This isn't an EA game release, its made by a very small talented team of people, actual people that you can communicate with. You will not find it in stores, they would not even be aware of it, for this setting the online distribution system is excellent and very straight forward. Don't forget its not finished - its clearly in ALPHA status, that is what you paid for. The AI is a moot point - its an online sim, the AI has its uses but it is not the primary focus of this game.