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Gap insurance sounds like a great idea. But it's usually pretty expensive if you consider how much it costs vs. how likely you are to use it times the amount you / your lender are likely to recover.

I don't think this is something I plan on using personally, it just solves the problem if someone is worried about being severely underwater. I don't plan to buy a car expensive enough that the small difference between what I paid and and what it is worth is enough to break the bank. As I said, I think the people most underwater are rolling in other debt. And the odds you will have a wreck that totals your car early in a loan are low.

Even then, gap insurance plus auto insurance would just cover the loan if a car was totaled; the unfortunate person who was upside down when his car got totaled would than have no insurance proceeds that could be put toward a replacement vehicle.

That unfortunate person would probably just run out and get another loan. They likely didn't put much down on their car if they are severely underwater anyway.
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