Part of the issue, IIRC, is that you want regulators who are experienced with what an industry does, and practically speaking the easiest way to get that is to hire from within the industry. We should probably keep that bit of the revolving door working.

The bigger problem is the reverse; we should really have the government do something like finance's "garden leave", where leaving employees are paid while banned from industry employment, so that whatever competitive info you had is outdated by the time you can take a job in industry again.