The rationale for using factored loads and cautious estimates of soil properties is to achieve a desired level of reliability.
In the European codes (Eurocodes), both factored loads and cautious estimates of geotechnical values are applied (characteristic values). Factors are different though when dealing with limit states and serviceability states.
I agree that sometimes the results are overly conservative, against evidence of existing buildings showing no signs of significant settlements. This happens, I noticed, particularly when dealing with the edometric or other compressibility moduli and long-term settlements and may be possibly due to procedure(investigation and lab) biases or overconservative literature correlations.