Regulations are a double-edged sword and serve many lords, just like most actions of government. It's possible for the same regulation to vastly decrease the risk of harm to consumers, yet act as a barrier to entry for smaller players. This can happen both intentionally and unintentionally. It also doesn't help that drafting effective regulations requires domain expertise, so the field is vulnerable to infiltration by industry to further their own ends. Then there's the sort of regulations that account to little more than elaborate CYAs, or data collections for some governmental official's pet project.

On the other hand, it's bewildering to think that every area of life has been subject to so much regulatory capture (in dozens of jurisdictions nonetheless) that the year 2000 formed a tipping point of corporate profits in the US. Half of the years have been under administrations more friendly to mergers, so the vertical consolidations in the style of CVS-Aetna or Cigna-Express Scripts could have gone on to become a tool for deep-pocket entrants to enter heavily-regulated markets. Instead, horizontal consolidation mergers like GlaxoSmithKline and Pfizer-Wyeth dominated. Don't forget AOL-Time Warner, Comcast buying AT&T Broadband, or the saga where SBC bought Ameritech and then the remnants of the original AT&T, renamed itself to AT&T, and then bought BellSouth too. Or any number of big bank mergers. Or oil companies.

So, it seems instead of entering new markets during a time of favorable regulatory environment, companies chose to buy out competitors instead, lay off a bunch of newly-redundant staff, and pocket the profit. Hmm.