Right now, the conversation goes, management: "I want x". Engineer: "X is insecure, we should do y instead". M: "Y will cost us X more than x, and it's never going to matter for us, anyway."
This puts the engineer in a position where they need to argue and justify the cost. Compared to "Sorry, I can't do that; it's illegal and I'd go to jail if I did that and was found out." Now the engineer doesn't have to justify anything. The law isn't a burden on the engineer here, it's a shield.
Yes, there are still some scenarios in which management insists. In my limited experience, that's in gray scenarioa where it's arguable whether the law applies. But the point is, it's much easier for an engineer to argue whether the law applies, than whether it is worth the money.
I think you can see these effects in the lengths companies go to protect healthcare data (hipaa) vs any other random personal data.