While I agree with you on the ills of "a run-away regulatory bureaucracy," businesses that look out for "their own self-interest" will always choose to cut corners if it allows them to make an extra buck, unless the costs for doing so are imposed on them.
The real catch is that for the free market checks you mention to work, all parties need to have all of the information (i.e., potential consumers have to know that the product might contain a toxic substance, and what the side effects of using the product would be because of it). Since corporations (sans regulation) will do everything they can to suppress that information, someone needs to impose a cost on those corporations for acting this way.
Without environmental regulation, corporations will dump their waste wherever and whenever they can, even if it causes earthquakes or birth defects, because it's cheaper than cleaning up their messes and disposing of things safely. The market rewards that behaviour - a company behaving badly will have lower costs than its competitors, and will drive them out of business unless they start behaving badly, too.
Sure, corrupt regulators make the process much worse than merely corrupt corporations, but that just means we need to clean up the corrupt bureaucracy, as well as the corrupt corporations. Corruption has to cost, or the market will not correct it.