Friendly fire is indeed a commonly raised issue and has been specifically addressed in 3.0.
The reason why friendly fire damage cannot be significantly raised is two-fold:
It is ripe for exploitation if larger amounts of damage are permitted without becoming wanted - how do you defend yourself if the attacker doesn't gain a bounty? What happens if multiple bullies target a single pilot & each deal one shot? In total the damage could be severe yet all attackers could remain clean preventing retaliation.
Secondly, learn to pay attention to what's around you. It's an important lesson to learn IRL, not just in a game. Better to learn this in a game than IRL. So many of the problems players raise are solved with a little patience & attention to detail.
So, any others?
The way I see it pretty much everyone who was asking for a higher friendly-fire threshold, specifically meant NPC authority ships. (so not for PvP and not for shooting other non-police NPC ships - they should still instantly attack in those cases to 'enforce the law' as is their duty)
In the thread linked above Cmdr ilo did some testing and has some videos.. Indeed the situation has been 'somewhat' addressed, as in his videos authority ships seem to ignore the first few shots.
The reason I say 'somewhat', is because I think that's still waaaay off of what it should be. As an example I suggested there a legit situation would be if you're actually causing authority ships hull damage and a significant amount (I said 25% there, but hey.. any will do that's more than a scratch.. say 10%?).
Now, the reason I think it would make sense to do it like that is... - well first of all the obvious: a bunch of people are complaining
- and secondly: throughout the years.. this has pretty much became a 'standard' in video-games (at least the more popular ones anyway) that if some NPC is allied to you, you can trust that he won't turn on you the minute you mess up and cause some friendly fire.. In fact in most other examples the game tries to determine if you actually intend to kill that friendly NPC or are causing friendly damage unintentionally.. and leaves plenty of headroom (aka: you pretty much have to bring that NPC to half-dead before he turns on you)
I also understand ED doesn't have to follow other games, but in this situation, I simply don't see a reason not to.. We're talking about authority NPC ships only.. even if a team of elaborate players take turns shooting to try and kill one using the threshold.. there's still plenty to go around..
Last, but not least.. I'm pretty sure receiving text warnings from NPCs (as it happens for the first shot) is a reminder enough for players to pay attention to their surroundings, without chasing them off and having them travel to another place to pay bounties to shady characters
So yes, I still think they shouldn't be all blood-thirsty for players causing them a couple of megawatts in shields

But if you watched the live-stream.. you might have an idea as to why we have the current system.. as that lovely gentleman in the texas-hat with the stuffed snake on his shoulders seems to enjoy designing really harsh law-enforcement systems haha.. (jk ofc

he seemed okay.. )
Cheers!
Oh and P.S.: Cmdr. Mere Mortal: I'd say get Horizons when you get a chance.. it's bound to be on sale sooner or later and then you can go ahead with your plans for the Python without issues. I tried a bunch of ships, but the Python is the one that becomes something totally different once the engineers touch it

For starters it can do 500 with a boost.. so regardless of how many policemen are chasing you, they don't even have a chance at catching you (anything more and you'd even outrun their shots rofl) and it turns at the rate of an un-engineered A-class Vulture.. so you can pretty much stay in the blind-spot of most lower level NPCs (the higher ones have better engineering themselves so a few might outmaneuver you, but not many).