Kind of odd that F1 is suppose to be the pinnacle of motorsports, yet the cars arent going faster - they're going slower
As others have already stated, there comes a point when the lap times are so fast, it becomes a safety issue, both in terms of protecting the drivers in case of accidents, and to an extent, protecting the drivers from themselves. Drivers, especially those racing is a series that bills itself as the pinnacle of motorsports, will always try to go faster. It's in their nature. But it's a matter of being sensible. Every year the teams try to engineer their cars to go faster. And every year they do. So the governing body has to keep introducing new restrictions to slow them down. Grooved tires, controlled tires, smaller diameter wheels, narrower chassis, banning of active suspensions, ABS, smaller engines, banning of exotic metals, technology limits on the engines, aerodynamic restrictions, ride height restrictions, wing size restrictions, and countless other measures over the years have all slowed the cars down. But considering the rules put in place to slow the cars down, it's amazing how quickly they still manage to go. On most race tracks, F1 cars are still significantly quicker over a lap than other racing cars.
The technology existed already during the 1980s, and certainly during the 1990s, to design and build light weight, open wheel racing cars, that were capable of delivering cornering speeds and cornering forces that would put the drivers at considerable risk. If for example, a team were to build a car such as the Redbull X2010, the driver would almost certainly need a pressure suit, similar to what fighter pilots wear, to keep from blacking out during sustained, high G cornering. Not to mention the negative braking forces. It gets the point where you're no longer driving a car but piloting a ground based missile. And as much as I love the fact that each F1 team designs and develops it's own car, there comes a point where you truly have to stop the technology madness. As it is, many of the traditional Grand Prix tracks are simply not suited, or let's say, conducive to modern F1 cars. And a car like the X2010 has so little in common with the average road car, that you really have to ask yourself, what's the point.
F1 cars are still plenty fast. And except for a few Le Mans prototypes, basically employ some of the most advanced technology in the racing world. It's more a matter of the teams being clever and innovative, within the framework of the rules, to consistently make their cars faster than the competition. And they usually do. If the day comes that GP2 cars, or any feeder series, are faster than F1 cars, than we'd have to really question what they're doing.
At which point the sport would become so expensive that the average life expectancy of a team would be about ten seconds.
Not necessarily. As much as my own interest in F1 has waned over the years and I now find myself more a fan of GT sports car racing, I don't pine for the days of H-pattern gear boxes and skinny tires. It's in the past and times have changed. And if that's what I want to see, I'll watch historic races.
The teams are going to spend as much money as is available to them. If some of the rules were lifted, the teams could probably create cars that are significantly quicker than they currently are without spending much more money than they already do. What costs money is the immense R&D that goes into gaining an additional 0.5 seconds from their current car, within the framework of the rules.