It could also generate a lot of hatred and callouts for harsher and stricter Regulations.
Which would be bad for centralized exchanges, and good for decentralized exchanges. There's really not much more you can regulate than what's already been regulated. It's just the nature of Bitcoin that can be trivially moved across time and space anonymously, if one compromises your setup.
yes they are insured but up to $250k only per account.
It still doesn't make sense to me how they plan to cover $250,000 for each account with compromised crypto, given that most of Coinbase's assets are in crypto.