More importantly we could all get killed by terrorists! Won't someone think of the children!!!!!
You have one of the most extreme cases of alarmism I've seen. I think we need to address your points individually in turn:
1. Flight controller may get confused and attempt to fly the thing. Or more realistically what happens when you lose a prop is the thing flips and splats straight down. Try it one day, or just jump on youtube and watch what happens when a quad suffers complete motor failure. They definitely don't come down at a nice angle, but simply fall out of the sky tumbling as they go.
2. The Phantom 2 is 1kg, this doesn't change anything but I thought I'd point it out since it'll significantly reduce the damage.
3. The Phantom 2 does not have carbon fibre blades. This is quite significant because plastic doesn't hurt when you get hit by it (spoken from experience).
4. It's night time, I think we'll be able to see the bright thing with 6 red and 6 green bright LEDs tumbling towards us, especially since we'll be looking right in its general direction.
5. LiPos aren't bombs. They burn well but they won't kill you, even if they catch fire while they are in your pocket, or on your lap (Google this if you want examples).
6. The public couldn't give a shit. They don't care about you, the drone or the FAA. What they will say is "awesome video" and hit share on Facebook. You know, kind of like everyone doing it right now. (Seriously like 6 people posted this on their wall in the past few days).
Now I wonder how many people die on the way to fireworks in car accidents, or die looking at fireworks while driving, or die getting hit by fireworks (this actually happened at one show I was at, my friend got a lovely payout and a great scar to tell war stories about). But more importantly shouldn't we be focusing on the terrorists? I mean all those people just standing there, in the dark, very little security, lots of people with backpacks. Think about it.