Sure, but no one said the screen has to be size of an ipad glued to your dashboard. My 2022 Volkswagen e-Up has a reverse camera and it's shown on a display maybe 2 inches large. And it's perfectly usable, I actually really like how minimalistic that is. There's no "infotainment" of any kind either, it's just a simple radio/bluetooth selection screen when the camera isn't in use.

The size regulation is based on viewing angle. For a tiny car like e-Up you are seated very close to the screen, so it can be smaller. For larger cars, you are seated further away from the dash and the screens must be proportionally larger.