That is very disturbing and why I'm bothered by this round of reporting.
The warnings seem to be just "hey you aren't supposed to hands off for this long" which, as others point out, are just the type of notifications that people start to ignore as they grow more comfortable with technologies.
This is a really important thing to remain vigilant about - Tesla and other self-driving car developers have an absolute incentive to blame/excuse/deny when it comes to fault for any autonomous vehicle accident.
My money is on us seeing a LOT of 'this dead driver was a total idiot' and 'this totally crazy thing happened that the autopilot could never have predicted and 100% of human drivers would have failed too'.
The hard truth is a lot of people are going to die in the process of self-driving vehicles reaching maturity. This truth is not politically tenable for any party to admit.
The real risk in this pattern of accidents followed by blame avoidance is that valuable lessons might not be learned from incidents. The aviation industry accident investigation process went through a very similar early life and many lives were lost unnecessarily before it matured into the robust, root-cause-driven, appropriately powerful system it is today. That was what it took for aviation safety to reach what I think most would agree is a suitable level of governance, and TBH I think autonomous vehicles are going to need to go through this same process and will hopefully get to a similar level of maturity without the loss of too many lives.
Is it acceptable for reasonable, rational people? A lot of people die today in auto accidents. A lot of people will die in the next 50 years as self-driving cars are developed. But I expect that fewer people will be dying in auto accidents 50 years from now. Does that make tragedies during development an acceptable sacrifice?
However, the concern here is not (primarily) that someone died, it's that the reasons they died are not likely to be fully and impartially assessed, and all possible lessons learned from their death, because nearly everyone involved with any power is incentivised for that to not happen.