There's a big fat IF in that rule and a whole huge NOTWITHSTANDING.
The context of "drones" these days is that of mass-market computerized hobby aircraft - with the computerization removing all the skill needed to fly and land a drone without crashing it on the first try, leading to too many operators being careless with them because they are no longer punished by the Universe in their wallets. This is unlike the "old days" of half-a-decade ago when even the most advanced hobby aircraft were a handful to fly - to the point that if you really didn't want to crash your expensive toy on your first flight, you used a flight simulator to reduce the chances and you joined an AMA RC club and had someone teach you.
The idiots that kheldan are talking about are Joe "Hold My Beer And Watch This" Operator who has gone to Wally World and bought hisself a drone (WOOWOO!) and decided to take it for a spin without so much as glancing at anything online or on dead tree related to the hobbyist aircraft community and safety recommendations. Computerized RC aircraft have led to a kind of Eternal September in the RC aircraft community - but unlike the original Eternal September, there are real meatspace consequences for careless operation instead of AOL "me too" posts in usenet.
So here's the actual law. Let's see if Joe "Hold My Beer And Watch This" Operator who bought an unmanned hobby aircraft needs to be regulated - registration being the least onerous of types of regulation
a) IN GENERAL - Notwithstanding any other provision of law
relating to the incorporation of unmanned aircraft systems into
Federal Aviation Administration plans and policies, including this
subtitle, the Administrator of the Federal Aviation Administration
may not promulgate any rule or regulation regarding a model
aircraft, or an aircraft being developed as a model aircraft, if -
(1) the aircraft is flown strictly for hobby or recreational
(2) the aircraft is operated in accordance with a community based
set of safety guidelines and within the programming
of a nationwide community-based organization;
Fail on "safety guidelines and within the programming of a nationwide community-based organization"
(3) the aircraft is limited to not more than 55 pounds
unless otherwise certified through a design, construction,
inspection, flight test, and operational safety program administered
by a community-based organization;
Fail on "operational safety program administered by a community-based organization"
(4) the aircraft is operated in a manner that does not
interfere with and gives way to any manned aircraft; and
Fail on interference and does not give way to manned aircraft.
(5) when flown within 5 miles of an airport, the operator
of the aircraft provides the airport operator and the airport
air traffic control tower (when an air traffic facility is located
at the airport) with prior notice of the operation (model aircraft
operators flying from a permanent location within 5 miles of
an airport should establish a mutually-agreed upon operating
procedure with the airport operator and the airport air traffic
control tower (when an air traffic facility is located at the
Fail on cooperating with any of this.
Joe "Hold My Beer And Watch This" Operator fails on all criteria except one.
His aircraft needs to be regulated. Indeed, I believe such mass-market computerized aircraft should have code embedded in the firmware disallowing flight until it is registered with the FAA online, with such a website introducing Joe Operator to the standards of the RC aircraft community, impressing upon him that irresponsible operation will bring down the wrath of fines if he's lucky. "Ordinary" "dumb" RC hobby aircraft need not be registered because such things are self-limiting when it comes to whether or not the operator is skilled - he is punished by the Universe in his wallet if he insists on being uneducated in this area, which is why the FAA didn't regulate hobbyist RC aircraft previously. And frankly, it's impossible to get one of these off the ground successfully without having someone teach you.
Responsible hobbyists will gladly pay their token five bucks, especially if asshole drone operators are smacked with fines for irresponsible control. Irresponsible Joes might not, but I expect fines for careless operation in the future to take into account whether or not the aircraft was registered, and thusly re-introduce the wallet-biting punishment inflicted by the Universe.