Consenual Sex Or Fornication
In Islam nikah or marriage is a publicly announced consensual decision to live together with a sincere intent that this arrangement will be a lifelong relationship. There are certain ‘adab’ of nikah and it establishes certain rights and responsibilities for each one of the spouses because as opposed to animals, humans are intellectual, social, and moral beings. With this understanding I really don’t see what your confusion might be.
All the problems identified with living a promiscuous lifestyle are true, but it takes a lifetime to see the results. We can’t experiment for our entire life and then find out at death bed that Allah was right. Once we believe in Allah we listen and follow while trying to understand his logic. He is the creator of this universe and he knows better about everything. Sometimes we start to feel like we are too smart and start questioning Allah. Regarding your example of people living together faithfully with each other without marriage. Think about why don’t they get married? There are two reasons. 1. The divorce laws here are unfavorable against men and thus they dread getting married. 2. They don’t get married because they can easily get out of a relationship and start a new one. They have less incentive to put effort into making a relationship going. A little difficulty is a reason enough to get out and change partners. Also from outside it seems like western societies are really enjoying life having no restrictions on sex, but their own studies repeatedly show that married people have much better physical relations than promiscuous lifestyle.