I would hope they'd do most of that stuff in the absence of regulation.
The result is public pressure for regulation.
Unfortunately economic theory and practice show that once an industry has come under regulation it becomes their priority to get control of that regulation. This process is called "regulatory capture" and inevitably succeeds. Once it has succeeded, the protections erode and the regulatory scheme is used to create barriers to entry for competitors. See the recent financial crisis for an example of this.
Depending on your politics you are likely to think that one of these failure modes is a bigger deal than the other.
Sometimes the third option of going to an industry and asking them to do something does work, but not always. I'd always try it first, but it's not always going to work, and the consequences of inaction can be pretty bad.