The $25k car is going extinct?

You can still buy a new subcompact car (like a Renault Clio or Skoda Fabia) in Europe for under 20k EUR.

The more interesting question is why these cars disappeared in the US. And while many of the factors discussed here are true for both EU and US (inflation, interest rates, manufacturer profit margins etc) I am surprised no one mentioned the 'SUV loophole' of US regulations that effectively boosted the SUVs (off-road vehicles are classified as non-passenger automobiles with everything that entails, notably much less stringent emission standards) and made the small cars unprofitable to make in comparison.

Also, the more SUVs are driven, the less safe people feel (and arguably are), accelerating the need to buy an SUV for safety reasons.

On the other hand, if you kill someone in a traffic accident, you feel shit the rest of your life.

I’m not sure, a lot of people seem quick to blame children for “darting” in to the road instead of accepting responsibility for operating a dangerous machine.

People lay the blame on children and their parents because if they choose to do their best bipedal impression of a deer there's really nothing a driver can do. One could be going 10mph and if a child darts out from parked cars at the right time you're gonna hit them. Heck, adults get hit by forklifts and other heavy equipment going single digit speeds all the time and even workplaces that separate traffic nearly completely don't eliminate them at scale.

Ignoring extremists is easier than preventing (or reducing to a point that you stop complaining) these accidents at the limit, so that's what society does. Tough luck.