It makes no sense for everyone to be so concerned about the survival of companies like Knight -- especially people opposed to algorithmic trading in the first place. Just let firms like Knight blow up! Their loss is others' gain, after all.
There was half an hour of wacky behavior in certain stock prices during Knight's whole blowup process, but that affected essentially zero long-term investors. Long-term investors don't need protection from this sort of incident.
Now, a flash crash is a bigger deal since it is more of a market-wide disruption. I still believe that long-term investors have little to worry about in one since the essential characteristic of such an incident is that it is over quickly (certainly none of my personal investments were ultimately affected by the flash crash). But, to the extent it is worth regulating to prevent another flash crash, I think software verification would be an overcomplicated and ineffective means of achieving that goal.
I'll also state that long-term investors have little to worry about from high-frequency traders. The whole point of HF firms is that they make a few pennies per trade. That's far less than the brokerage fees paid by long-term investors, so why complain about the profits made by HF firms rather than by the grasping brokers?