I don't think you'll find a 1000 fps camera on a "standard" AV platform. And if you did, I imagine it would be too noisy to be useful without a ton of illumination.
But machines aren't (yet) as capable as humans at driving-situation-recognition and driving-decision-making. One way they can compensate for those shortcomings is to be superior in other ways: 100% vigilance and super-fast reaction times/decision-making.
No, that's only if you want the human to be able to make the reaction. If the application was self-driving, you'd prefer the car to react faster than a human. For a military application like projectile detection to avoid or destroy the object, you'd want something even faster.
I'm not sure what your argument is. Any self-driving system should strive to be much better than human drivers. It makes complete sense to have reaction time much better than human.
For reference I am making a farming robot that goes at 1 meter per second and I run the main control loop at 10hz. I would absolutely run a car that goes freeway speeds at at least 100hz.