Wiser, I agree with you that much lower entry barrier for those of modest means to invest in something that very well could improve their financial lives in a way that wouldn't be possible otherwise is a wonderful thing made possible in our industry. However, that fact remains that it is possible with or without ICOs. For example, once an account is set up, anyone can invest $5 in DNotes - $1 today will buy you 20 DNotes. Of course, once it is discovered and fully valued the potential for appreciation is reduced.
The SEC has a mandate to promote capital formation. It promotes various legal crowdfunding platforms such as CF (crowdfunding) Reg. D - 506 (c), Reg. A+ Mini-IPO and others. I bet if our law makers can figure how to make the sale of ICO legal, SEC will promote it as a tool for capital formation.
Furthermore, it is important for us to understand that the required registration is their means of getting full disclosure and continued reporting information so that the consumers can make informed investment decision.
It is certainly true that the lower entry barrier for investing is true without ICOs. As you said people can buy DNotes or any other cryptocoin directly from an exchange. I've bought into one or two ICOs and for the most part I've learned that the coin tends to lose value as soon as it starts getting traded on exchanges. It may or may not appreciate in value later, but you have time to study it and watch the market to find a good entry point. So if I'm interested in a coin, I often will just wait until its ICO is done and it goes on the exchange and then wait some more. If I still want it, then I'll buy it, but I'll admit a lot of times I sort of forget about it.
Since a lot of exchanges host ICOs, my hope is that increased regulation (or crack down) of ICOs doesn't jeopardize people's ability to acquire ordinary cryptocoins on exchanges.
I appreciate that required registration is how you get full disclosure and continue reporting information. It can also be prohibitively expensive for new entrepreneurs. I can understand why some of those people are excited about the ICO concept. I'd like to see the best of both, where there is proper disclosure and information to help investors make informed decisions but the cost isn't prohibitive for the startup, and the investor can participate with amounts as low as $10 (and not be required to invest some prohibitively high amount), and where people of all means can participate, not just "accredited investors."