yes, you are missing something.
While there are clueless parents everywhere, I would like to hope we were not them.
Our kids were on leashes, on every blue run our mountain has to offer. DH is a super strong lifetime skier, and a ski patroller to boot. The kids learned wedge turns with the help of the leashes, and it was a great progression for the whole family. We saw no safety issue with it,and neither does our mountain management/skipatrol/ski school so I don't get what your problem is, was. Our lift operators are way used to families and little kids.
Another reason for leashes is that the ski schools don't take kids until five or six. On our mountain the patrol kids are typically out with their parents by age two, on leashes, and not parked in day care. Once the kids are old enough for ski school, there they go, into group lessons, or into the racing program.
I think leashes are awesome, and I see no problem with progressing off the bunny hill. I see a lot of parents doing way more stupid things: backwards skiing, hold the poles, holding the kid between thier legs, or backpacks. I don't know where you are but at the many family resorts around here I see it all the time.
Well I'm sure I will make someone mad with this, but it worked for us and for a whole lot of families I know. If the parents are strong and in control, what's the problem? it's not like the bunny hill is less collision and or injury prone than any other part of a mountain.