Your of course right... alot of people fly between 1000-2000ft because of the view.
The view in question being the ground; a stipulation of the basic PPL-A/ NPPL they hold. People fly higher because they either like clouds or they are droning on somewhere and want to get out of the weather; get there faster; or more fuel efficiently. For the majority of recreational flyers the view of the ground from above is one of the reasons they do it. Flying bigh being a highly expensive irrelevance.
I am not talking about flying at 10,000ft above the clouds etc. And almost nobody intentionally flies in cloud because it is usually rough.
Let's say the cloudbase is 3000ft.
If you fly at 2500ft then your chances of a midair are (wild guess - there is no midair data from this high) 100x or 1000x lower than it would be at 1000ft, but your view is still pretty damn good. Better in fact because you can see further. As Keygrip says, the radio works a lot better too.
And if you fly at 2300 or 2700ft then you avoid those who have been trained to fly at 2000ft (most of the UK PPL population) or 2500ft (the rest of the UK PPL population trying to comply with the quad rules)
You can't have it both ways i.e. fly at 1000ft for a good view of everybody's garden, and also avoid most of the traffic, when everybody is playing the same game.
If the cloudbase is lower e.g. 1500ft then there is far less traffic about anyway.
The circuit will always remain a dangerous place, and apart from keeping a lookout there isn't much one can do. Just get out of there as fast as possible. A lot of midairs have happened in the circuit.
There is a problem with flying higher: gliders are often found near the base of clouds, well above most GA traffic, so flying at 2500ft under a 3000ft cumulus cloudbase on a hot day may not be that safe. But one can avoid known gliding sites.
The rest of the time, airspace permitting, one can go above the cloud where there is practically nobody, and it is perfectly smooth, but one needs to plan and execute the flight as fully IFR if doing that.