Many of the FAA rules were created due to some clowns doing crazy and stupid stuff. Maybe the regs are an over-reaction, but for a field that is so regulated, there is an incredible amount of absolutely dangerous crap done to aircraft by their owners, mechanics and unidentified persons. While it represents a tiny percentage of the good people who work in this industry, you don't have to look too far for their droppings.
Ask any mechanic and you'll hear loads of war stories about how things were misinstalled/misreparied. If every mechanic has seen examples of stuff that will kill the pilot, then you have to admit something is horribly wrong. I certainly don't have the answer, and I do not believe that government regulations (however well intended) are a good thing. The regs we have don't seem to solve the problem - and it's making this hobby much more expensive than it should be.
For some amusing & interesting examples, take a look at Avionics West's web site. They have a page dedicated to the "Crazy Things We Find."
http://avionicswest.com/errors/mainpage.htm