Well, as I said, it always starts with things like fire codes and then goes from there to spending tens of thousands on traffic studies. $15,000 for fire alarms might be ok. $150,000 for wheelchair accessible bathrooms is, in my view, overkill. They charge $100/month; that would mean at least 125 memberships just to pay for the bathrooms.
But, just taking your specific example for a second, that actually seems to argue in favor of my point that these regulations are safety theater...because the Cromanon people received a permit!
www.nytimes.com/2011/04/21/world/americas/21briefs-7MEMBERSOFBA_BRF.html?_r=1
...evidence showed that the club was given a permit
although it lacked basic measures like fire extinguishers.
A permit was issued, but the place wasn't safe. So that argues in
favor of the concept that it was safety theater. Just like how the TSA doesn't actually protect against terrorism, it just tries to appear like it does.
As for the next move, this is a Rorschach test. One response is to increase the stringency of the regulation, indirectly fining all other businesses for the Cromanon incident. An alternative response is to penalize the regulators involved, in the same way that Arthur Andersen paid a penalty for giving a thumbs up on Enron.
The key difference is whether there is one government regulator or many distributed and competing reviewers. If there is only one regulator, the inevitable result of any terrible incident will be to monotonically ratchet up regulations on everyone, TSA style, with the only concern being PR and no heed for costs. Alternatively, if there is competition among reviewers, then that organically leads to an ongoing assessment of whether a particular rule is worth the costs or not.