So what exactly do you propose? Building a time machine, going back to 2011 and asking Casacius not to make them? Because I don't see what your point is. What is done is done. Maybe they weren't the best idea at the time, but you, and everyone else, is just going to have to live with it, no?
What to do now? Populate the idea that only printed-by-the-owner paper wallets are secure. Fix the page
http://en.bitcoin.it/wiki/Physical_bitcoin , remove this false statement from it "the private key remains hidden, which is likely achieved through the use of a tamper-evident seal". And... I don't know. Somehow stop the production of physical bitcoins.