Another thing I forgot to mention. In a very honest implementation of a trading platform (as it should be):
All stop loss orders will be executed exactly at the stop price - not one bit lower or higher.
Uh, isn't that impossible in a lot of cases? The exchange can't control when and where market makers decide to place - or cancel - a limit order. How could they possibly guarantee that a stop loss order will find someone else willing to buy, at exactly that price, in the middle of a crash?
Or are you suggesting that exchanges should be the counterparty themselves? That seems like a recipe for disaster.