The design change was possibly an improvement when the only user was the builder who was intimately familiar with its design, but ended up being a disaster when someone else tried to use it under stress.
IMO the FAA strikes an excellent balance between allowing people to make crazy flying contraptions that can be dangerous, yet also keeping the civilian flying population safe. One place where there can be some unanticipated risk though is, like in this case, a homebuilt aircraft that's sold to a non-builder.
In any case though, in my opinion, the primary cause of the accident was not the fuel selector, it was John Denver's lack of preflight. He took off with very little gas in the plane, and virtually none on the tank he had selected for takeoff.