That interpretation isn't necessarily unmeritorious. Suppose you have a place with Level 7 checks and balances and people are content to live under them. If you dial it up to 9, then they move to a place at Level 2, which otherwise wouldn't have been worth it because of other trade offs. So the new rules don't take you from Level 7 to Level 9, they take you from Level 7 to Level 2.

But there is also another interpretation, which is that the new thing is going to happen in whatever place has the least stringent rules anyway, so more stringent rules don't improve safety, they just deprive your jurisdiction of any potential rewards from keeping the activity local, and provide people in other jurisdictions the benefit of the influx of people you're inducing to leave.

So, obviously there is also interpreting that statement in a vacuum, which I sort of did, and interpreting it as a criticism of this current proposal. I think it's slightly ambiguous what was meant, even given it's location, because it seemed like a general sentiment and not specific to this proposal.

I'm not sure in the general context your first came is super applicable, given that there's a lot of exposure and worry about this topic. Laws and regulation can apply to use as well as development, and large markets can have outsized effects when they require things (such as how CA emissions laws and GDPR have), and I'm not sure worrying about chasing away business is a worthwhile concern when many people are very afraid of a societal consequences of the thing in question.

For what it's worth I don't really follow the same stance when it comes to military technology, because that's meant to be used in a situation when local (which in that case can be national) laws have little or no sway, but I'm open to arguments about how viewing them differently isn't useful.