Regulation only gives the illusion of protection. It provides little if any actual protection. Bank failures, e.coli outbreaks, and other crises always result in a call for the government to save us from it ever happening again. But they continue to happen. In fact, the regulatory state increases the likelihood of a major disaster happening, because of government's preference for protecting larger politically entrenched companies. Consider e.coli. An e.coli outbreak at a small farm will affect a handful of people. An e.coli outbreak at a centralized processing plant could endanger hundreds or thousands. The failure of a small local bank will affect a relative handful of people who could be easily helped by private charity. If Citibank goes under, the effect will be felt worldwide. That is why I have often heard that some corporations are "too big to be allowed to fail." Such a phenomenon is the direct result of government interference in the economy.

You said that regulation has become protection of entrenched companies and practices. I think that it has always been thus, and is not a recent happening.