Are the regulations in this case meeting the end goal of the FCC - that good use is being made of the RF space?
Were that not the case, I could enter an arms race with my neighbors where we all compete for the strongest Wi-Fi blockers so that our own signal is strongest, perhaps to the point that one of us might get a business-class connection and start allowing paid access to it. "Too bad our block can't use Wi-Fi. Say, neighbor, for $100 a month I bet I could let you share mine."
Most of these mobile hotspots are going to be limited by the cell connectivity, not the wifi speed, so it would be pretty easy for multiple APs to exist on the same channel.
Completely illegal is not bad? Whatever the reason, this is bad.