It feels like the offroad/utility (SxS) manufacturers are quietly lobbying Kei vehicles as they eat into their sales (As they are 95% better than SxS anyways)

Are they, though? I won't put anything past scummy lobbyists, but side-by-sides are way more purpose-built for off-road hooning, and if anything, the logical thing there would be to argue for expanded use on-road for them. (Then again, logic doesn't apply to the AAMVA.)