Earlier quoted context omitted.
That's essentially an argument for a professional licensure system for software development. Setting aside that professional licensure requirements are anathema to the spirit of the hacker movement, they would likely have prevented the creation of a massive pool of technology companies, including Apple, Microsoft, and Facebook. Even that proposal would stifle innovation. However, what's being suggested by the OP is n…
I agree that these are all significant challenges. However I believe that in the absence of a licensing body, we as professionals can still reach consensus-based conclusions on minimum standards of professional ethics. And I suspect very strongly that the engineers on this particular project would have clearly violated any standards of professional ethics we could agree on.
Civil war amongst software developers, with utter lack of due process, and ostracism as punishment are not as pleasant to the ear as "consensus," but that's the end result of what you're proposing.
This, of course, misses the central flaw in the proposal: If "good" companies refuse to hire engineers with work history at "bad" companies, you'd be forcing the very engineers who now want to do work you consider "good" back into doing work you consider "bad."
Setting aside the horrific personal implications this ham-fisted approach would have, by its very nature, a refusal to hire policy would have the exact opposite effect that you intend.