Bolts are generally designed for pure tension, so putting them in tension as defined by the torque on the fastener and then in bending from the steering linkages tends to be hard on both the bolt and the hole. When you have a tapered fit, the axial preload torque is distributed over the entire tapered contact surface, so you have a larger contact area and thus lower, more uniform contact stress.
When you don't have a tapered fit, then just the head of the bolt and flat surface of a SRE are in contact with the mating surface, as well as possibly a couple of points or lines in contact on the side of the bolt shank and the hole, leading to much higher contact stresses and a higher potential for localized material yielding/failure. In the straight bolt scenario, I would imagine you're exceeding the yield strength of the steering knuckle with the combined loading, which then allows the bolt to loosen...and by tightening the bolt further, you're probably just accelerating the process. You could "upgrade" to a higher strength Grade 9 bolt, but that would just require an even higher torque and create the same issue to a higher degree.
The tapered studs really are the best solution to running SRE's in steering applications IMHO. I've haven't decided on those over TRE's yet, but if I go SRE's, there won't be any straight drilled holes through knuckles, pitman arms, etc.
Tobin