I do get wound up at the car hire desk when the person in front holds the whole queue up, while they argue for ages that they were told that their insurance was fully inclusive.
My understanding is that the car is insured fully comprehensive, just as your car would be in the UK. The extra insurance covers your excess, lost keys, broken windscreen, punctures, etc.. These are items that would not normally be covered on your insurance, so I do not have a problem with this being offered, even if they are a little pushy. It is your choice to judge whether the cost/benefit ratio is worth paying for. The alternative is leaving a credit card imprint as security.
What I resent is being massively overcharged for the fuel. But to be fair, sometimes I am paying in the region of 10 Euros or less per day's hire, so I suppose they need to try and claw some cash back somehow. I think if the hire package is cheap enough, and the car is adequate, you just need to forget about the minor irritations.
Dave