I agree that there is gray area, but these are people with very real needs that are finally being addressed in a cost effective way ($2000 or less!). There is a world of difference between open heart surgery and uninvasively strapping something on the end of my arm.
How about a simple disclaimer - not to be used in safety critical applications - and let people have their $50 hand? When people start selling hands with bigger promises that have more grave consequences, dial up the regulation on those.
In the end it doesn't matter much if my prosthetic finger breaks - I'll just print a new one. Could I get a rash if I use PVC plastic vs some bioplastic? Sure,but I can also get a rash from the $5 sneakers from Walmart. Is medical grade stainless going to be better than something I get from Home Depot? I would imagine so, but I buy all my metal from Home Depot and the like, and I have yet to suffer any real consequences from that. I have a stiff neck from the $10 pillow from BB&B - shall I buy a $3800 orthopedic, medical grade, hypoallergenic pillow? Nah.
I'm making generalisations that may extend beyond this particular device for this particular user because its an entire field that isn't well serving its users at the present time. Implementation far lags technology because business and operations models don't exist to promote the development of these technologies. The kind of approach article is suggesting is promising, but not a complete solution.
The reason why regulation is needed is that the people making/designing/marketing the device have by doing so made an appeal that they are an expert.
Often, failure of these devices have far higher consequences than failure of typical consumer devices (maybe ice axes and crampons are also in this category!). Its the same reason why doctors need to be licensed to practice, whether it be for open heart surgery or to diagnose someone with a runny nose.
Probably assistive devices (and medical technologies in general) are over-regulated now, but that doesn't mean the solution is no regulation.