That's the reason why there will be a panel dedicated to discussing crowdfunding at the upcoming startup conference in mountain view (http://thestartupconference.com/).
Literally, all content from the article about crowdfunding is: "The crowd funding proposal has some merit. Companies could seek to raise up to $2 million through individual donations up to $10,000 each or 10 percent of a person's income..<snip>.. But in its current form, even the crowd funding piece is problematic because it provides little oversight of the process by letting just about anyone into the fundraising game."
I can understand why it is 'instinctively' bad to not have any oversight into the funding process, but how is letting just about anyone into the game bad? It could even have positive impacts to startups like mine who don't have valley/VC contacts but know individuals who could spare 10k.
Given that the costs of starting up have plummeted, it makes sense to allow crowdfunding while removing the auditing/legal requirements because crowdfunders would be taking lesser risk than investors of yore. Practically a certified investor (1m+) has the capability to invest in 100 startups before (s)he can invest in 1!
Some params are good, some params are bad.
It's not that letting anyone into the game is bad per se, it's that some params are bad and will try to defraud small unsophisticated investors and it is probably easy to do so.
Congress and the SEC presumably would like to gain the advantages of crowdsourcing but also want to protect the small time $10, $50, $100, $1000, $10,000 investor.