It is dangerous to assume stupidity - especially when the people in question are making threatening gestures in your direction. What you describe is one possibility. Another is that these lawmakers (or the people they work for) DO understand these issues, and the inevitable problems that arise are the expected outcome.
Yes, Hanlon's razor is a good heuristic most of the time, but in this case we have a pattern. Technology that empowers people (e.g. real crypto/security, better communications technology like the internet) has been attacked fairly consistently. Tools and methods have been criminalized in the past with alarming frequency. For this specific issue, there are a lot of people invested in the status quo of where computers ("ii.e. "most products", eventually) are easily monitored/tracked, and easily attacked if the need arises. Dan Geer described our situation very accurately in his outstanding talk last year: the current strategy of the US government (and others) with regards to network security is "all offense".
When proposals like this happen, people are tying to shape your future. Maybe they want to get an actual law passed. They just want to use a confusing topic in a show for the benefit of their constituency. Maybe the goal is propaganda or shifting the Overrton window. Whatever the purpose, we would be lucky to have stupid lawmaker which we can at least attempt to fix with education. Unfortunately, what looks like stupidity is often agenda, and underestimate their threat at your own peril.