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The main reason is more tangible to people. It is more reliability and simplicity. For instance the Toyota Tundra used to have a V8 that was pretty bomb proof. But over the years, manufacturers put in more efficient but more prone to problems turbocharged smaller engines. The bearing clearances went down, thinner oil then can be used which is also more efficient. But the margin for error when you are putting what used to be a performance engine in a car is much smaller and there have been issues. As car prices have gone up, people value a time tested drivetrain. There have been a lot of problematic CVT transmissions too.
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I agree. I have never met anyone in real life that's concerned about telemetry on their car.

They're worried about the cost of a new car, and the cost of all the electronics, should they go bad.

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The Chinese government banned Tesla vehicles from entering (Chinese) military bases. This is due to the prolific number of cameras streaming live video to a hostile (to China) organization/government. One can find blogposts by analysts who show that the upload stream from Tesla vehicles includes cabin audio.
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I’ve certainly met them, particularly in the context of Chinese EVs.

I really wish car review publications would start adding a ‘Privacy’ section along side the Perfectly, Road Handling etc parts of reviews

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Do they seriously not? Malpractice
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I realize that I'm not a person in your real life, but FYI I'm concerned about the telemetry in my car.

(Just stating this as a data point for you.)

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