The car I drove in HS, 30 years ago got 25mpg. My current car, very similarly sized, gets 27mpg. Sure, I can merge on a freeway 4 seconds faster but the vast majority of efficiency improvements have not gone towards reducing our oil dependence.
Your new car likely weighs much more? The modern market demands a driving experience that's like sitting in our home - complete with huge sofa like seats, air conditioning, touch screen TVs, cameras and thousands of sensors. They can either cater to that or go out of business.
Carting around two tons of unnecessary random tech toys and the kitchen sink is inefficient regardless of the energy source. That's a separate problem.
So instead of realizing gains in efficiency, cars were simultaneously made less efficient to realize gains in safety and comfort. The end result is still cars that are about the same as what they were decades ago.
how does it matter? are we supposed to keep downsizing/downgrading from the high school cars just to make up for all these trends that we didn't choose?
Oh there's no doubt my modern car is objectively better in numerous ways. That said, we could be doing a lot more to optimize for fuel economy but the market doesn't seem to want that.