You're clearly not up to date with the situation on the ground here. We're upgrading our cycle infrastructure and removing cars from city centres at the same time. Where there's no space for segregated infrastructure or in rural areas where it would not be economical, speed reductions are generally applied: 30 km/h in built-up areas, 60 km/h outside.
As for the why: car and bicycle speeds are just too different. Segregation improves life for both, and especially safety for cyclists, who will always be at a physical disadvantage in an accident.
