No, a full round action does not equal two standard actions. It takes place instead of all actions on your turn (except free actions).
From Actions in Combat on the d20srd:
Full-Round Action
A full-round action consumes all your effort during a round. The only movement you can take during a full-round action is a 5-foot step before, during, or after the action. You can also perform free actions (see below).
Emphasis added.
In fact, if it equalled two standard actions, that would be a problem: you only have one standard action in a turn! Normally you're swapping your standard and move action, remember.
Can you exchange extra standard actions for a full one? I don't know if there's rules around that, and your GM may say yes. A full round action should be exactly that though: your full round. Then again, that wasn't written with someone who has three standard actions in their turn in mind.
“Why” is a question we cannot answer
The authors very rarely give us any insight, commentary, or evidence for the reasoning that went into individual rules. As far as I am aware, there is none for this particular rule. That makes it an impossible question to answer.
However, I want to address some other points:
It doesn’t make sense: the rules often don’t
There are tons and tons of rules that don’t make sense in 3.x. Some of them are simply abstractions to ease play, some of them are corner-cases the desigerns probably didn’t consider, and some, like this one, just.... don’t make a lot of sense
It doesn’t seem fair: things rarely are
Yes, Feint is basically a complete waste of time because of the way the rules work. The only person who cares enough about the flat-footed status to consider the move is the rogue, and the rogue relies on dual wielding and full-attacks so he can apply Sneak Attack as many times per round as possible, so he’s not going to use Feint (except with the invisible blade prestige class; see Tridus’s answer). Meanwhile, Feinting would be an appropriate and useful move for the rogue, who could use to have it just a little easier to apply Sneak Attack.
All true. The rules don’t care. There are much greater balance problems than these in the rules.
Solution: Houseruling!
Your suggestion that Feinting replace a single attack, rather than being a standard or move action, is a pretty good one. I suggest that, even though you do it first, it replace your attack with the lowest attack bonus (since you won’t be using it anyway as a Feint is a Bluff check). Without Improved Feint, I suggest, have it only apply to the next attack, but allow Improved Feint to allow it to apply to the rest of your attacks that turn.
Best Answer
It matters for some characters
If you have, for example, Two-Weapon Fighting, Flurry of Blows, Rapid Shot, or haste, you may have more than one attack even though you have low BAB. You would need a Full-Attack to use those. Even with only one attack, some characters (e.g. a 3rd-level Swordlord Fighter) can get other benefits from making a Full Attack, and therefore may Full-Attack for just one attack, burning their Move action for the sake of that bonus.
But if you have only one attack and don't have any other special feature that references Full Attacks, there is no reason to choose to use one; you'd be burning your Move action for no reason.
Note that you do not choose between Attack and Full-Attack until after that first attack (assuming you still have a Move action to make the Full-Attack an option).