I think you raise a very valid point, Bruce. And I would think just about everyone here would agree that the regulation juggernaut is out of control.The real blame lies with our system of over-regulation.
If there were no penalties for being honest, Boeing would never have had to withhold information like they did.
Over-regulation is the most dangerous thing I have to cope with in my personal flying. Yet it is hard to believe there is any evil genius behind it all. What we actually have is the unintended consequences law.
Here is an example of the unintended consequences law in operation... bike helmets are mandated to save lives. In fact they do the opposite, to the surprise of most people.
Rod Stiff believes in this law too. When asked about changes to the Jabiru, he said that every change brings about unforseen and undesirable changes. And the history of changes to the Jabiru bear this out. Jabiru were too fast, in hindsight, with some of the changes they made.
However, my understanding is that the reason Boeing chose to do what they did was in order to market the Max as an aircraft requiring minimal retraining of flight crew. The penalty for being honest (as you put it) would have been the commercial disadvantage, not a regulatory one. Unless you are questioning the regulatory requirements for pilot training?