Regulations would be impossible to enforce. You can write up as many laws as you want but trying to enforce security constraints on new websites alone is an impossible task.
Example:
* if your company lets someone steal your users' data, your users can sue you and get lots of $$$;
* if you are the CEO of a company and you let someone steal your users' data, when your users sue your company, you have to pay X%.
Edit: formatting
Besides, it's not that difficult if the requirements are minimal best practices - the regulatory body need not even get involved until a breach has been traced back to someone who didn't follow the rules.
We're not trying to make security perfect, just deal with blatant disregard of user safety.
I suggest 3 to start:
1: No storing passwords in plaintext.
2: Hashed passwords must not be calculated with fast algorithms like MD5.
3: Hashed passwords must be salted.
These three things would have solved most of the major breaches everyone has heard of, don't take meaningful development time to implement, and so there is zero excuse for not doing them.
Why 'new websites alone'? Enforcing security standards on new/small websites would be harder than on large ones, and the large ones are more important. There are already many cyber-security related laws that are in place and more-or-less enforced. Having these laws makes large companies invest money into at least attempting to follow them for fear of legal repercussions.
That being said, Yahoo should have force reset passwords.
That would be true if the user created, stored, authenticated the password himself.
Wait, you think the larger a property gets, the easier it gets to secure it?
That is to say, it's a reference to the effort of the regulatory body, not of the property managers themselves.