Why was it necessary for a bunch of internet pranksters to do this? Where was law enforcement, while all of this was going on? They couldn't manage a simple sting of their own?

All the other people who are insured by the companies being defrauded are the victims. Their insurance costs will increase to help cover the payments that the insurance company makes to the fraudsters. There is a simple solution; stop offering insurance coverage to people visiting Everest. The world would be a better place if thousands of people did not go up there leaving waste and destruction.

True. But one generally creates the other. If citizens are not afraid of their government, the government has nothing to fear from them. They still need to watch the military and the entrenched bureaucracy.

The Russians have always been afraid of their government, with good reason. The secret police in Russia go back to Ivan the Terrible in the fifteen hundreds. The government has always been some sort of monarchy or dictatorship. They have only the illusion of voting and democracy, and no tradition to tell them it should be different. And do not tell me it is the same everywhere. In the US we do have real choices, sometimes both bad but real. It is our own fault if we keep electing crooks and idiots.

How would that work? In theory, not only to the laws of your resident country apply, but also the laws of country hosting the website and the country of the company owning the ISP to name just a few. The whole thing is basically unworkable and anyone with access to an admin account on the computer can set up an account with any age they wish, but politicians do not care.

Except that the laws may differ on who is an adult in each jurisdiction and they will make the responsibility of the operating system manufacturer to keep track of all that. Once the government starts taking over the responsibilities that should be those of a parent, the sky is the limit.

Because the laws of several countries are being changed to say that it is. Politicians rarely care about the actual effects of their actions only the perception by the fraction of the population who support them.

Which raises the obvious question. Why are you spending so much on something that cannot be trusted to do what it is supposed to do? A low-level human employee, who did these things, would be fired immediately. What makes you think that the other programs are more reliable. The evidence suggests that they are just better at lying about it.

That sounds unfortunately likely.

When will bot traffic overload the system to the point where it collapses. Also, what are the AIs likely to do, when they start getting vast numbers of cannot connect messages.

So, of the order of a 100 tons per person. About 10 to 20 moon flights. Not perhaps impossible, but incredibly expensive and you also have to provide water and air. Those could presumably be found on the moon, but the infrastructure to collect them would be another considerable investment. If I was seriously considering this, the first thing I would do, is build a linear accelerator (at high altitude) with a nuclear reactor to power it. That might make it practical to send significant weight of material into space (unlike rockets). However, the potential to use such a system as a weapon would create issues with building it.

Blame the news media, we can only comment on what is out there.

Hot oil in low gravity sounds like a bad idea.

Five percent or one percent it is still not practical. Calculate the weight of a hectare of soil a few centimeters deep and the amount of soil needed to grow food for one person for a year.

I always preferred the Terry Pratchett version where the turtle was swimming through space, and they were concerned whether it was a male or female turtle. Think about it.