It seems to me like government-enforced standards are just another case of this tradeoff—they are quite a bit more useful, in the sense of carrying the force of law and applying to all players on a non-voluntary basis, and harder to implement, due to the attention of legislators being elsewhere, the likelihood that a good proposal gets turned into something bad during the legislative process, and the opportunity cost of the political capital.
It seems to me like government-enforced standards are just another case of this tradeoff—they are quite a bit more useful, in the sense of carrying the force of law and applying to all players on a non-voluntary basis, and harder to implement, due to the attention of legislators being elsewhere, the likelihood that a good proposal gets turned into something bad during the legislative process, and the opportunity cost of the political capital.