The root problem here is that the regulatory environment has been (in bits and pieces over the years) set up to be a checkbox exercise for those on the inside and exclusionary toward new entrants. The rules and process of that side of things are not subject to serious oversight so they can be as exclusionary and rent-seekey as the lobbyists and the bureaucrats want, potentially preventing any new entrants.
Musk has, very rightly, realized that the punishment track is subject to far more political and public scrutiny than the approval track and that if you are doing things that people want like building cars and sending rockets into space the scrutiny will prevent them from doing anything to financially cripple your operation.
Ironically, this is playbook that's common at the complete opposite end of the economic activity spectrum where there literally isn't the money to comply. People run unlicensed businesses, do un-permitted work, violate minor regulations, etc, etc, all the time. And by the time anyone figures it out, if anyone ever figures it out, it's too late.