storage settings revert to zero

Yeah, this is intentional.  We respect the Delete Cookies functionality in your browser and also clear Flash Local Stored Objects.  Because we store information about sites on a per-domain basis, those preference files effectively leak information about where you've been, so they have to go.

In my opinion, all of this stuff is irrelevant at this point.  Tracking technology is happening on both the client and server side, and controlling LSOs for privacy isn't buying you much and in an era where 1TB hard disks are dirt cheap, the disk storage controls and their increments are silly (10K, 100K, Unlimited!).

All of these things were conceived before Private Browsing / Incognito Modes were available in major browsers.  Now you can just turn those on, allow websites to store everything they want without degrading your user experience, and when you exit the private browsing mode, all of that information is blown away (it was stored in a temporary location when in private browsing mode).  It's still not a perfect privacy solution either, but it mitigates all of the HTML5 tracking vectors (of which there are many) as well as the Flash Local Stored Objects.

There's some more context here:

Stealthy Web tracking tools pose increasing privacy risks to users | Computerworld

Anyway, these dialogs aren't good.  We're well aware of the problem, but there are intractable problems unique to being a hosted process inside a browser that makes it hard to distinguish whether or not clicks are "real" or whether or dialogs are obscured (see: Clickjacking - Wikipedia, the free encyclopedia).  They're tiny because they date back to a time when VGA was a relevant display size.  It's an issue that's definitely on our radar, and increasingly important as they're very tiny on displays with more than 4K resolution.

The ideal solution is to move many of these dialogs into the browser's chrome (and you'll see this on dialogs like the Camera/Mic access in Chrome), where the browser has an authoritative view of the user input and is always on the top later of the display, but that requires buy-in and engineering effort from every single browser vendor, so that's a slow road to travel.  The rest of them we need to reconsider and re-engineer, and those are ongoing discussions inside the team.

In the short-term, the best method for dealing with these is to avoid them, as private browsing mode really does render the majority of the related concerns moot, and others (like disk consumption of LSOs) are fairly trivial.