What Internet disaster will be needed next for the free hand of the market to wake up? Take privacy, for example. It is certainly on everyone's minds and that involves issues beyond just the Internet. It extends to backup tapes, documentation, multimedia, email, instant messaging, etc. It took the losses of hundreds of thousands of records over the course of a few months before anybody woke up and took notice despite the fact that the danger was well known and privacy "loss" issues have been going on for years before the debacles of 2005.
Governments worldwide must act now in a coordinated manner to protect their national economies and security to put in a sensible set of baseline security requirements and enforcement to ensure compliance. Far too much is at stake to keep allowing the free hand of the market to whip up fervor and cause another set of inconsistent, vague, fear-driven regulations that are ultimately useless to be enacted.
The Internet has the potential to continue adding value to the global economy, but its security and that of its nodes must be protected, which requires coordinated global regulations and enforcement. If not, then the system will become so saturated with threats and uncoordinated ad hoc countermeasures that a great deal of the network's value will be lost and future value suppressed.
To citizens this means the potential to lose another Library of Alexandria. To corporations it means accounting costs, opportunity costs and lost revenue from dealing with security breaches, unreliable service levels and constantly escalating security and compliance requirements. For nations, there will be constant pressure to protect the economy and national security that can not be dealt with effectively due to the global nature of the Internet.
In closing, the Internet is amazing and its potential value may well be beyond reckoning, but to even pursue it effectively we must proactively implement globally consistent regulations that include enforcement provisions to safeguard our future.