There are very serious drawbacks to e2e encryption that can't be ignored for all use cases. Searching and indexing, reporting, analytics and performance are aspects of a program which become difficult or impossible if all of your data is encrypted everywhere other than the client. It's easy to just wave your hands and say "all data should be e2e encrypted" but it's not that straightforward.

Unfortunately, you're right; I guess there is no easy, handle-it-all answer; it all depends on the specifics of a given system

At some point it has to be unecrypted to be useful. That's where the vulnerability is.

Depends whether and to what extend your service provider needs it - for Proton, it's always client only decrypted