The problem with tyre models seems to be that there isn't a lot of correct info available. Car 'dynamics' is all pretty straightforward, Suspensions are tricky but its all forces, angles, distances..
Tyres? Most you can find is very 'basic' info on this, plus of course many of the publicly available grip vs slip curves that show lots of grip drop off. It is quite understandable that a guy making a sim physics engine will use these dubious models and data as a base.
It seems like most of the time they are copied to sims, because programmers assume the data is correct and the models accurate. In fact it just seems to be a case where books have basically copied eachother from lack of good sources instead of really delving deeply into the matter.
I'm sure pro companies like Bosch or Siemens etc have long since developed way better and complex models but they probably like to keep that to themselves, plus for 'sim use' you need a 'simple and effective' model. Industry models tend to be overcomplex, like a ~60 parameter Pacejka model, where you basically can (and will at least a few times
go badly wrong with the input unless you have the $ to actually properly test the tyres.
So I would say it is anything BUT hard to believe that most of today's racing sims have considerable flaws in them, especially when it comes to tyres. Its just a 'grey area' as far as freely available data goes.
The extend of the error is subjective. I would say any sim that can have even a hint of POWERoversteer produced by a front wheel drive 'normal' car (i.e. with tyres at the back and some weight on them) is not a small flaw. Its quite fundamental tyre behaviour.
This is where it becomes subjective. Todd said he reckoned the last LFS physics patch (quite a while a go that was) to be a huge improvement. I would say it was a small step in the right direction; I was and am still left with the general impression that some fairly fundamental things are not good enough yet. I do think that of the currently available sims, LFS does the best job, but the room for improvement is huge.
Scawen does seem aware of the shortcommings, hopefully to the extend that somewhere before S3 final we'll have a much better tyre model. That is also good compared to the ISI competition where the developers just don't really seem to care what reality is.
Currently though, I'd say all sims go wrong somewhere pretty fundamentally when held to the 'realism light'.