I'm definitely a fan of the thesis that government should be
more competent, although I don't think that's where you were going with that. :) I'd love to see government regulations that demand that you should stress-test the software, hire someone competent to analyze the code, get licensed engineers to be involved in design and development-process review, etc.
The difference between your devil's-advocate worldview and my worldview is I think not in our perception of facts - we both agree that the government isn't super competent right now - but in our optimism. You (or your viewpoint) isn't optimistic that government regulation will ever get good, and would rather just stop trying, but is pretty confident that individual humans and companies are unlikely to be abusive, or to cause much damage if they are. I'm resigned to expecting that someone, somewhere, will try to get away with the bare minimum required, and in the absence of regulation will just be too stupid to realize they're risking people's lives until people die. But I do have higher expectations of government regulation, and believe that it can be good or at least we can work towards it being good.
(Also, government regulation doesn't have to involve the government doing things. Several industries have so-called "self-regulatory organizations", which mostly exist because of the implicit threat that the government could start regulating more heavily. That is, the SROs only exist because of government letting industry know who the boss is, so there's a distinct positive effect of that posture! The SROs aren't perfect, but to first order everyone is better off: the government isn't interfering with things they don't understand, yet actual, competent oversight with meaningful enforcement powers exists. Self-driving cars are too small an industry at present to meaningfully self-regulate, but it certainly sounds like they won't be very shortly.)