I had to ride off of the road and onto the shoulder when I could see (in my helmet mirror) that a passing car wasn't pulling to the left to pass. He ended up knocking off my left pannier. He did come back to check on me, and during our conversation, he did mention that he did see my (dynamo) tail light. It's counter-intuitive, but it's not enough to be seen. (this was when no other traffic was in sight).
Having said that, you do want to be seen, and the question is how to do it and be seen in all conditions.

I agree that it is a problem.
Brightness is good when you are among other bright lights and need to be noticed.
In a place with no other lights, this same bright light will be overwhelming.

My own guess is that the best compromise is to use a light that is of moderate brightness, but covers a large area. There's a limit to how much area you can cover on a bike, of course.
A compromise might be to use lights mounted at different points on the bike. Back when I had a Niterider headlight, I made a bottle battery for it out of translucent water bottle. I included a couple of yellow LEDs, so they lit up the bottle when the headlight was on. This made the bike visible in all directions, at least to a degree.

In fact, I was just riding on the local MUP last night and mixing it up with some heavy traffic as the trail crossed a road. With all of the traffic and the sea of headlights and tail lights, the odds of not being seen by at least one motorist seemed rather high. I decided to be as safe as possible and cross on the pedestrian crosswalk.

Steve in Peoria