Nah, blame the regulators too for thinking that filling out paperwork is likely to meaningfully dissuade someone from using human remains to make dog food. It was probably sufficient to explain to that one guy why that was bad.
Greed doesn't listen to reason.
yes, it's a felony because of regulation, made by... regulators
What's the difference? Laws are written by legislators, i.e., the elected representatives. Regulations are written by agencies created and empowered by laws to oversee certain parts of the government/governmental functions.
Regulators work largely by requiring reports because most agencies don't have criminal enforcement powers, and thus can act only on the basis of what is (or isn't) reported...
Laws and regulations which are not merely codification of natural law ultimately come down to attempting to create rules which apply to some people and not others. Unfortunately, legislators and regulators get away with this all to often through a combination of good propaganda and willingness to employ unjustified force to achieve their goals.
Check the box that you understand and expect possible, random inspections.
Because that's the most palatable alternative.