You have to consider locations, targeted participants, and the lower speeds - for the non-racer bureaucrats whose approval is necessary - and almost certainly, insurability.
1/16th mile (330 ft) is like the old top-of-2nd-gear deal back in the day: in some urban/suburban areas, that was about all the room you had, and if you'd gapped the other guy and were pulling away, you won.
So yeah, while it seems a bit short & silly, it's better than a lot of street scenarios.
Might even become a training ground/feeder of some sort for the 1/8 and 1/4 tracks & events.
I used to think 1/8-mile was weak; but I find it OK now, and it's arguably easier on parts.