IMO bright taillights are not needed on a group ride and could be annoying to following cyclists, particularly in blinking mode. The brightest could also affect fellow riders night vision.

When riding on unlighted streets I want enough light from my headlight to be able to spot road hazards soon enough to avoid them. In city riding I want enough light, front and rear, so that I am not unnoticed by other road users.

The biggest probllem with bright cycle lights I believe, as the OP noted, is that most have poor beam patterns that would be illegal for the low beam on a car headlight. For higher power bike lights a lot more work needs to go into reflector and lens design so that the lights have a reasonable vertical cutoff. Light going out above horizontal is pretty much wasted. Take a look at some of the beam pictures in the MTBR light test thread linked to on another current thread in this subject area. What is the point of brightly lighting tree limbs 20+ feet in the air?