If you run a buggy program on a modern OS, it won't crash the system or impact other processes. If you run a buggy program on DOS, it will write to random physical addresses, probably clobbering the state of other processes and of DOS.
Modern OSes can run arbitrary binaries, but they can pretty much run arbitrary non-adversarial binaries - problematic binaries have to be intentionally written to exploit the system (as opposed to DOS, where non-problematic binaries had to be intentionally written to not break the system).
No, it's like telling the candy maker that their candy made them sick or otherwise left something to be desired. If the candy maker cares about making good candy, that can be useful information, even if they may not have time to do something about it. If the candy maker cares about making mediocre-to-bad candy freely available, then they will say "it's free, go away."
Welcomed and encouraged to submit their driver for consideration. I would guess that the vast majority of vendor-proprietary drivers would get rejected from upstream, so for most cases the viable options for vendors wishing have an driver in mainline are to improve an existing reverse-engineered driver or rewrite the driver to fit the kernel standards.
There are a number of things that could be done to improve the experience with proprietary drivers, but all of them undermine the Linux driver philosophy. For the kernel community, any driver that is not mainlined is doing it wrong (and there are a number of compelling arguments behind this position), so the out of tree / proprietary driver experience is intentionally not improved.
There's basically no chance that the current proprietary drivers will ever end up upstream, so if ARM / nvidia drivers were open source they would be out of tree.
Given that the most frequently cited reason that these drivers should be open source is improved user experience (less breakage when the kernel changes, easier install), what would be the advantage of an out of tree open source driver?
Modern OSes can run arbitrary binaries, but they can pretty much run arbitrary non-adversarial binaries - problematic binaries have to be intentionally written to exploit the system (as opposed to DOS, where non-problematic binaries had to be intentionally written to not break the system).
It's a dramatic improvement.