I can buy $5/lb tomatoes at Whole Foods or $2/lb tomatoes at Stop & Shop. Apparently Whole Foods perceives a market for food which isn't the lowest price possible. People will differentiate based on quality just as they do for safety. They don't need to be completely rational - they need to be minimally rational.
The point of the original article is that regulations lead to more problems - they are not just a response to, but also encourage the centralization of factory food production just like you read about in Fast Food Nation.
Unreasonable regulations are a problem, yes. But there is a wide gulf between "let's ammend our regulations to be more reasonable" and "let's throw our regulations out entirely."
Only if your idea of effective political action is to start out arguing for a reasonable exception to a rule that unjustly prevents small-scale home butchering and end up thunderously denouncing the entire concept of "government".
Here's a simple rule that might help (aimed not so much at you, but at the author of the original article): Do not bring the word "firearms" -- to say nothing of an actual firearm -- into a conversation about the regulatory status of a small farm stand. Avoiding generic rants about "taxation" would also be good. Focus, people, focus!
Companies will cut costs any legal way they can. If you make it legal for them to be unsafe, they will be. The counter argument are market forces, but I don't think that works here. It assumes a completely rational consumer who understands the risk they are taking. We're not that rational, and generally don't understand the risks.
We didn't always have safety regulations. Bad things happened.