That ^^ is the problem with putting a small person on large wheels. The headset is actually higher than the seat, so the handlebar is necessarily even higher, resulting in an upright position, all the rider's weight on the saddle, inefficient pedaling, and so on. Pretty terrible.

One wonders how the industry can get away with it, but of course the person riding a bike like that has never had a chance to ride a bike that fits and had no idea what it could be like.

We, all of us, taller and shorter people alike, use the same stairs. The standard step rise, whatever it is, feels normal to everyone. Crank arms are the same way; anyone can ride a bike with 170mm crank arms, and since that's what most bikes come with, that's what most people have, and it feels normal. That's not to say it's the correct length, but no one complains.

Edit: corrections made.