Should government regulate crowdfunding?

Earlier this week, the US Securities and Exchange Commission proposed rules for regulating crowdfunding that could hit as early as February of next year. If adopted, these rules would affect MMORPG Kickstarters and similar ventures dramatically. Notably, the regulations would cap crowdfunding revenue at $1 million dollars per year, limit individual contributions according to income, eliminate most advertising, and require management through a registered brokerage, thus raising the cost of Kickstarters beyond what your typical Kickstarter project creators can actually afford since that's why they were using Kickstarter in the first place.

It seems to me that at least in MMOland, everyone loses, whether you're Star Citizen with 24 million bucks raised to date or Baby's First MMO Startup with two part-time employees and a cat running PR. And too little in the proposal targets fraud, which to me is the most concerning aspect of crowdfunding as it stands.

What's your take? Should the SEC be regulating crowdfunding ventures the way it would any other investment or fundraising method? Are these proposed rules on target and welcome, or do they completely miss the mark and stifle the very indies Kickstarters are meant to help?

TH