Spanner, an average weight is used for the pax and hand luggage. Most passengers probably aren't exactly the average, but overall the average works out about right. Of course if 200 obese people turned up there would be an issue. What the allowance doesn't account for is a further 10kg or so on top of the pax and their hand luggage. Airlines and authorities will be forced to address this either by banning, weighing or some other means, so I wouldn't buy shares in the jacket manufacturere right now. You don't see any problem, but all these extra 5 kgs add up. On a normal day the aircraft will takeoff fine and you won't notice any difference - if you have an engine failure at V1+1kt or reject a takeoff at V1-1kt and the aircraft is 5t heavier than the performance figures are based on, then it's going to ruin your whole day.
Curious, yes I think the hold luggage policy is the root cause of many problems, particularly excessive cabin luggage and consequent irritation when pax have nowhere to stow their hand baggage. Whilst understandable that pax may seek to circumvent the restrictions, that cannot be ignored for the reasons above.