The limited variety of LED light bulbs on offer down at the convenience store is due to basic market factors, not so much to technical limitations.
The average consumer prefer to buy a light bulb that lasts 1000 hours for 1 dollar compared to a 20 dollar light bulb that is promised to last 50.000 hours.
LED lighting is used for a lot of 'big lights': street lights, industrial lighting, stadion lights, etc. LEDs are not limited to table lamp use.
LEDs dissipate less heat for the same amount of light compared to most other alternatives. The luminous efficacy of a modern LED is now over 100 lm/W, while a tungsten bulb is under 20 lm/W. Fluorescent lighting is about 60-80 lm/W.
It is a bit imprecise to say that a LED casts a harder light than, say, halogen. The hardness of light is defined by the relative 'size' of the light source to the subject. The sun casts a very hard light. The sun is big, but it is also very far away, so light rays from the sun appears to be parallel. The size of a LED emitter isn't that different from a halogen wire compared to the distance and size of the subject you are illuminating. Many light fixtures are designed to enlarge the apparent size of the emitter (using reflecting and diffusing surfaces) and thereby cast a softer light. If you want softer light, don't use a spotlight, use a different kind of lamp.
The first white LEDs had a godawful blueish tint. Nowadays you can get much better light quality and lower color temperatures. Still, the spectral composition of LED light is not as good as a black body radiator like a incandescent bulb (or the sun). Many people, myself included, like that light quality.
A 12 W LED, equivalent to a 60 W incandescent: