> If power is expensive on a given day, electric cars can wait to charge, or even discharge if they aren't going to be used. People can wait to run laundry dryers.

That buys you days, not weeks.

The smoothing out things also have kind of an ugly failure mode. People set their cars to sell power into the grid if the price is X% above normal, but that prevents it from getting to be 2X% above normal on the first day, and then fewer people choose not to run their dryers. The batteries get exhausted sooner because their own existence prevented the price from going up very much at first, but that's the profit-maximizing strategy because nobody knows exactly how long the shortfall is going to be and the shorter ones are more common. Then the batteries get depleted quickly and when the shortfall lasts for more than a couple of days, you're not only low on battery storage, you now have more people whose cars have a charge gauge pointing to E and they need to get to work in the morning.

> The market will incentivize actors to smooth out before those kinds of restrictions are necessary.

It isn't a regulatory restriction. It's, where are you setting your thermostat if electricity hits $5/kWh today?

> At least in my corner of the Midwest, either the sun is shining or the wind is blowing, and often both.

The problem is that it's occasionally neither and that doesn't have to happen very often to cause a lot of trouble.