>They can sue the driver directly and go after any extra assets that he may have (house, retirement savings, bank accounts, the car itself),

This only helps if the driver is wealthy. If you get run over by someone without any money, you should still have help paying medical bills.

>by some miracle he has an umbrella that would kick in too.

As you seem to understand, the purpose of an umbrella policy is to protect the assets of a wealthy driver (or other policyholder). That doesn't change the fact that the victims are at the mercy of the driver's financial situation.

>That's actually why they have the low limits, if you want higher you need to get an umbrella and protect yourself.

Yes, one purpose of insurance is to protect yourself. Another purpose of it is to protect others. If you opt for the lower limit, that adversely affects anybody you run over. I think that the required insurance should increase, because the victims don't have any input in what insurance you choose.

>One question though, I had thought I read somewhere, and I could be mis-remembering that if you were charged criminally you could not be sued for personal liability in MA. Does anyone else know anything about this?

I don't know the answer to that. You might be right. I hope that's not the case.