It works pretty well though. Giving 1 meter of clearance is just not possible in the very tight old city centers of the Netherlands, which also have a lot of biking traffic.
You really should. I think you'd be pleasantly surprised. The skill level of European drivers is far above that of American drivers, and because of laws like the one mentioned, they're much more respectful of riders and walkers.
Why not? As a tourist in Holland, there is absolutely no reason to drive a car. If you go to Amsterdam, there are a lot of interesting cities within 45 minutes by train. Even Groningen or Maastricht are within less than 3 hours by train (which is too far to do fore one day, but if you book a hotel over there for 1 or 2 nights is perfectly feasible)
Traffic in downtown LA, NYC or even Rome is worse than Amsterdam, and I'm really glad that I never had to drive in places like Vietnam or Cambodia. Sure, driving in Amsterdam requires you to pay attention but it isn't that bad.