In cases of permanent grounding there has to be a decent compensation package.
Airline-subsidized LOL insurance, without the mental illness clause would be one way through. ALPA offers such a policy, however it is not cheap and there's no payout in cases of being unemployable due to (at least in the states) airline hiring/re-hiring practices, which while not LOL per se, carries the same result as losing one's license.
I also appreciate your way of considering transport from an everyman's perspective, Oldoberon. The taxi analogy is spot on and yes, mile for mile, flying remains the safest way to go. As to passenger fears, for EU/UK airlines, the newly enacted two-crew cockpit SOPs are surely intended to mitigate those fears while also limiting liability.