That looks pretty gnarly, but it more than likely looks worse than it is. The bumper is plastic mounted to metal. Most of that damage is plastic, so a lot of it can just be popped out.

It's absolutely for safety. Cars are made to crumple now. The old design philosophy was if the car could survive, so could the occupants. We now understand that things like crumple zones are actually a good thing, where we sacrifice the car so the occupants can survive, instead of the other way around. They also make them with built in pedestrian safety, mainly because laws in most countries say they have to. Low speed pedestrian impacts are (relatively) safer than ever before.