Upvote for accuracy. This is the best solution to many problems. Liability should only be limited between two parties through a contract. It's ridiculous how by paying the government a higher percentage of your profits you better protect your own assets if your company hurts a third party (ie pollution).
This would easily be the easiest way to solve many problems, as the author points out, but it is also the only time I've had to grant credence to the argument it leading to a race to the bottom. Usually you only hear left-wingers say that when they complain about free markets or sweatshop labor abroad, but this is a reform that might actually drive out business abroad. I don't even think America has the economic clout to make this an effective measure when the status quo is so widespread.
It's a great idea, but at a time of psuedo-protectionism taking hold in and each territory at local and state level trying to carve out their own economic niche industry, it's as politically nonviable as it will ever be.
One more thing: Don't assume that they could go after all you're worth, either. No one would associate with an investment, that, if gone awry, would ruin them financially. The point is that liability would be determined on the market between individuals, and there wouldn't be a one size fits all LLC. There would probably be enough to discourage irresponsible behavior, but not so much to make investors fearful.