What's with the side-view mirror?

I bought a new car recently, and quickly discovered that the side-view mirror on the passenger's side operates the same way the mirror on my old car did - it totally distorts the distance between you and the car you have just passed or the car that is about to pass you illegally on the right.

Can someone tell me why they make the mirrors like that? Instead of putting a label on it that warns you the object in the mirror may be closer than it appears, why not just install a mirror that doesn't play tricks on you? If regular mirrors are good enough for the rear-view mirror and the driver's side mirror, why aren't they good enough for the passenger's side?

I'm guessing it is done to enlarge the overall field of vision, but the disadvantage seems to far outweigh the advantage - not being able to trust your eyes when you check the mirror. Because I don't trust it, I always look over my shoulder to make sure there are no blind spots and to satisfy myself that the car I have spotted in the mirror that appears to be a mile behind me isn't fast closing in.

What gives here?