When you crash your car, you just kept on going! You knock over a shopping cart? No big whoop.
Previously, car games would go through a huge, punishing rigamarole if you so much as tapped another vehicle, never mind flipped over on a cactus. You'd have to wait for the whole thing to reset (Mario Kart I'm looking at you).
But Crazy taxi just let you keep driving. It was really cool to keep your momentum and simply be told "by the way you hit something, I'm taking some points off FYI".
Too many restrictions and errors in an interface feel like you're making a big deal out of something you care about but the customer doesn't.
For the love of Peet, only show errors when you absolutely must. As often as possible opt for warnings or informational messages when things might be wonky.