I really hope California isn't overreacting, possibly due to industry pressure from taxis etc. The state should be doing all it can to support, grow, and encourage this innovation.
I don't think anyone disagrees. California's been very proactive in promoting and allowing self-driving car trials.
But you can't allow just any driverless car on the road without ensuring that it's safe — that's why there's a permit process for it. This isn't just another app — people's lives are at stake here.