For me, it is about being responsible and limiting your level of risk.

Listening to music on the car speakers at a normal volume is far better than wearing headphones. You can still hear sirens, horns, your indicator lights clicking, and most other cues in the world that let you know what's going on.

Silence is obviously better, if we are making that argument, but this discussion is about where we draw the line of acceptable risk. To me, speaker music is below that line, but blocking your ears with headphones is above it.

I don't want a pointlessly over-regulated world either, but I do believe people should make their choices with consideration for the safety of themselves and others.