So on one hand, the world is rife with thieves and scoundrels and the state is the only thing standing between what we have now and Mad Max. On the other hand you're willing to entrust people working for the state with with powers undreamed of by the thieves and scoundrels.
But what happens if thieves and scoundrels hold positions within the state? Restaurant owners pay them to make laws against Food Trucks. Cab drivers pay them to make laws against Uber. Hotel owners pay them to make laws against AirBnB. In the wrong hands, the regulatory state becomes a weapon. That is what is happening now.
Your response appears to assume that I believe that the "State" as we know it is the only mechanism for creating a well-agreed upon set of rules, or that I hold any illusions of perfection anywhere humans are involved.
Thieves and scoundrels exist in all strata of society, it's a natural phenomenon. We create rules about the rule makers - bureaucracy is both a natural response and outcome. Vested interests infect and corrupt all things, which is why we provide mechanisms for review and change. These mechanisms may not be perfect or easy in all situations, but they can be made functional if we intend to fix them.
You seem to not acknowledge the fact that a non-regulatory state becomes a weapon as well.
I am not impressed with the black and white dichotomy expressed between "regulatory state," and "free market," - in fact - the choice of "regulatory state" vs. "state of regulations," speaks volumes as to your intentions. We have direct experience with both overly-regulated states and under-regulated states. Neither work particularly well - instead, we strive to constantly re-balance them and find better ways.
It is for this last reason that I think it is good that they have come under scrutiny. This provides clear barriers for others waiting to see the rules made ineffective so that they may (wrongly) capitalize on the weakened system, and an excellent opportunity for the local population to consider the state of a rule and a bureaucracy that may have run too long unexamined.
To one last point: unscrupulous actors also pay politicians to remove laws and regulations for their benefit. The lack of or presence of, a regulation in and of its self does not predict a positive outcome.
But what happens if thieves and scoundrels hold positions within the state? Restaurant owners pay them to make laws against Food Trucks. Cab drivers pay them to make laws against Uber. Hotel owners pay them to make laws against AirBnB. In the wrong hands, the regulatory state becomes a weapon. That is what is happening now.