They were planning to ship by the end of the year -- obviously the regulator should get involved before it's in the hands of users.
I've seen requests from regulators before. If you don't have or can't produce exactly what they asked, you call them up and tell them some parts will take longer. The point is to have a dialogue; the threat of sanctions is just to make sure you work with them.
- What's in the installation + operating manual? - Items 1-3
- Is it safe? Did you do testing? How? Items 4-6
- What vehicles does it work on? What happens if you screw up during installation? Items 7-8
- What happens if an owner screws up and puts in an unsupported car? Item 9
- Did you think about whether this keeps the car compliant with other safety regulations? In particular, did you think about the legality of blocking/removing the mirror? Did you do testing? Items 10-12
- When are you selling/shipping it? Items 13-14
- Anything else you want us to know? Item 15
Every single item is a completely reasonable question to ask. I'd certainly hope comma.ai knew the answer to each of these questions before they sold it to the public.
Again, if 2 weeks wasn't enough time, then negotiate with them and give them what you have. Threats of daily fines are often boilerplate that get tacked on to ensure that people take the request seriously; I'd challenge anyone to find an example where the regulatee cooperated with the regulator in good faith and still got fined for not responding.
For one of many examples, public information seems to show that his device affects the rear view mirror in a manner that violates specific pre-existing regulations, they ask him how does it affect the rear view mirror and how does it comply with those regulations.
There are only two reasonable responses for such a question - (a) he submits the evidence he has (and had before receiving that letter!) that his product is compliant with these regulations; or (b) he acknowledges that right now he cannot demonstrate that the product is safe and will not sell the product.
For such devices, documentary evidence (including testing results, and all other "random crap" requested) is an integral component of the device - if you don't have all this done, attempting to sell the product is prohibited. That is pre-existing regulation.
[edit] unless his real plan was to go to China all along...
If he couldn't answer these very basic questions 2 months away from shipping these things, WTF is he even doing. If he hadn't proactively initiated communications with NHTSA long before now, WTF is he even doing. These are all excruciatingly, painfully obvious things to do, and the fact that it never occurred to him to do them brings into question his judgement about pretty much everything, from technical issues to basic life choices. At this point I don't think I'd trust this guy to mow my lawn, much less develop autonomous vehicle software. His reaction to all of this and how he deals with adversity is just as revealing about his competence as everything he's done so far.
Trying to innovate without being encumbered by the glacial pace of government regulatory bodies?
His refusal to put up with the NHTSA is an indicator of a low tolerance for bullshit, not incompetence.
Double so if it's a product that is very likely to kill its owner.
And square all that, if your products is either used every day or can cause large amount of death, accidentally.
With regard to the more general point of your post, even if it's nominally possible to eke out a profit under overburdening regulation, you're still allowed to take a principled stand against it.