There's a good episode of 99% Invisible that discusses Prop 65, including an interview with the original author of Prop 65, David Roe:
https://99percentinvisible.org/episode/warning-this-podcast-...Yes, there are a lot of problems with Prop 65, but the podcast also highlights the benefits. Slapping a Prop 65 warning on foodstuffs in particular significantly decreases sales, so it's not something you just do merely to avoid extortionate lawsuits. It incentives testing beforehand, and if you find contaminants to then reformulate. Notwithstanding the seeming ubiquity of Prop 65 warning labels in California, the salient effects are significant and largely hidden--you don't notice all the products that don't have the label, and don't because they were reformulated to avoid the label. Prop 65 was one of the most significant drivers in the US of the removal of lead and other contaminants in products. The author of the bill admits the unintended consequences have been significant, especially harassment lawsuits, but he also argues there aren't really good alternatives that could have achieved what Prop 65 has with a better cost/benefit ratio.
Having an army of private lawyers vigorously prowling for contaminants in products is a pillar of Prop 65's success. You couldn't achieve what Prop 65 has with centralized regulation, not without creating tremendous (i.e. costly in time if not money) bureaucratic hurdles to creating and selling products in the market. Prop 65 is a kind of "ask for forgiveness" model, rather than "ask for permission". The former is generally more preferable if you want to preserve market dynamism and profitability, while also minimizing the risk of regulatory capture, and lax, haphazard enforcement. Moreover, you get the escape hatch of just adding a warning label, without having to take your product off the market.
There is a centralized regulatory aspect to Prop 65--the State of California's list of contaminants--subject to typical bureaucratic and lobbying externalities. But on balance Prop 65 seems defensible, however imperfect. After listening to the podcast, which if anything leaned into Prop 65 criticism, I softened my views on Prop 65.