If someone is going to be biking a lot, it makes sense to invest in a quality bike which will stand up to extensive usage and be easily repaired when something inevitably does fail. But lots of people bike only occasionally, and would rather not bike at all than pay for much more bike than they need. For these people a budget bike could be a great compromise. Paying a lower price for an inferior quality product is not some alien concept confusing the unwashed masses, it's standard practice that everyone expects. People can take their time deciding on a bicycle to purchase, and can completely walk away if they're not satisfied with any options; consumers worried about a bad deal can easily go online and look at reviews and recommendations for bikes.
While there may be some merit to requiring budget bike makers or sellers to perhaps label their products to indicate their expected lifespan and thus make it easier for consumers to make informed decisions, people should have the option to go to a convenient location and quickly buy a cheap bike if that's what they want. While I'm sure its proponents mean well, the proposed "minimum durability standard" would make cycling more inaccessible and restrict legitimate design choices.