I believe employers are legally required to inform you of monitoring your actions, usually in an employee handbook of some kind. The issue is that in general it is "your actions / calls / etc are subject to monitoring", versus naming specific ways they are monitoring you.

In general, if you're on the company clock and/or using company equipment - you should always assume you're being monitored. If you're doing something wrong and it is caught by you being monitored, then tough luck. If the results of monitoring are being misinterpreted and you weren't doing anything wrong, explain it to your boss and there should be no issues, and if there are you have a crappy boss (and the same situation would likely eventually happen without monitoring.)

The issue is if companies are monitoring you on your personal time, when you're not using company equipment. That's another issue entirely and IMHO wrong.

Buckyballs were labeled as for adults and not for kids before the commission came after him. However, because they are so similar to a "toy" it was labeled as a concern by the government. In my opinion, this action removes personal responsibility from the parents (the product was clearly labeled), and there should have been no actions against Buckyballs as long as they were properly labeled. There are many other products out there that are far more dangerous which look like toys which do not have these concerns.

Further, it begs the question:

Is it the norm for similar cases where the owner/company simply went out of business (without doing a recall) on an unsafe product, for the owners to be held liable for the cost of a potential recall after the fact?

  If he is held personally liable, but a large number of other cases had companies which went out of business and the owners were not held liable - it seems likely there was some type of bias on his case.

One last item:

Protection from personal liability when you are a shareholder/officer of a corporation isn't absolute (you can still be held legally personally liable in certain cases.) Certain people here advise they don't like this fact, as they feel people should be personally liable. However, to be frank - fewer people would take risks if they faced personal ruin due to a lawsuit. A better option would be to revoke a company's incorporation status and in repeat offenses remove the ability for people to be part of another corporation perhaps. This would have the positives, without the negatives.

People still play Tradewars... There are still telnet BBS's available and development continues on some versions.

If I'm going to play a game that consists almosts entirely of repetitive tasks, it better be text based!

I should have clarified in the previous comment that if you don't have the ability to dictate the terms of the contract (such as if you buy the product in the store), it is my belief that you can likely recover damages already if it is due to gross negligence of the developer in question in most jurisdictions. As mentioned in the previous comment, proving that can be another issue entirely.

The following is my non-professional opinion:

You can already sue developers.

Any development contract should have language indicating what is desired and minimum standards compliance (example: PCI compliance if you're handling credit card data.) If it is later found that the developer did not adhere to the terms of the contract, they can be sued for breach of contract.

Further, if the flaws in the software are extremely severe, even if the contract didn't explicitly call out the problems observed, they could be covered under gross negligence and the developer can be sued for that as well.

As with many other things, a new law isn't needed for this, the ones on the books are perfectly suitable. The money/time it takes to get a remedy to the issue via our court system is another matter entirely, but would be similar regardless of a new law.