I agree that over-engineering is not going to be the way forward, but the greatest value of lessening risk is the PR aspect and it should not be overlooked.
Just look at the people in this thread who argue that the space program and all of the research and the eventual benefits from extraterrestrial energy and resource production are a waste of money. Now, add some deaths to it. It doesn't matter if there are one or two or a hundred.
Those deaths will get exploded in the media in a manner that mirrors how people are afraid of things like Ebola or terrorism while the actual probability of being killed by those things is much less than being killed in a car accident. There will be commissions, there will be spineless politicians grounding whole programs, and then those same individuals will complain that NASA isn't making any advances and is a waste of money.
Accepting risks like that is not something an individual can do in a risk adverse society without it rippling outward. And that's ultimately where the US is going.
The US needs to look outward to save not only its position in the world, but also preserve the underlying morale of the people who live in it. Granted, the old method of looking outward tends to lead to wars, but the interesting thing about space exploration is that it provides people a means of looking outside their borders without having to dominate their neighbors. And if you think about it, that might well be the greatest advantage of all.
So, I agree with you on what needs to happen. Astronauts and test pilots dying in accidents needs to increase our determination, not cause it to fold, but that is a problem with our inward looking society which NASA engineers can't control. What they can control is trying to be as safe as possible to make sure they can keep going. What we need to do is to not accept that there will be deaths, but to make the case that there is concrete benefit to those risks to begin with. The case isn't being made where it needs to be.