Do you think a law that nuclear meltdowns would send the CEO to jail would have stopped nuclear accidents from happening?
I don't think this takes seriously enough the possibility that said CEO doesn't think the failure mode is likely and ignores it. Plenty of people are willing to take risks of the flavor "heads you win, tails everyone loses".
If this law were in place and enforced, Altman would already be facing multiple felony charges for the Hugging Face incident alone.