You have to cut the rules somewhere - otherwise racing would be deepest pockets AND unbelievably dangerous.
Since you have to cut off the rules somewhere, there will always be a need to keep engineering and spending money, to the extent of what is allowed as per the rules. Everybody is looking for the leg up - that is what drives the engineering expense and time, not the rules but the fact that everyone is trying to be faster within whatever rules there are.
Plus, these engineering findings are not for nothing, there is a trickle down effect.
And , I see your point very clearly about "well, did I win because I had the best car, the best driver, or because the rules set allowed me to go fastest?" BUT if one car clearly dominates, to a point where they're miles ahead of the competition, then racing is boring to watch. They have to keep it competitive, keep it safe, and keep people's interest in the racing series.