think it is a good thing it blew up in their face. It should add more caution to people over-shorting a stock.
Having said that, if they try some sort of bailout, or try to regulate the small guy and not the big guy I'll be pretty unhappy. Anyone who loses money by overspeculating should lose that money.
Of course, if we end up in another major crisis like 2008 over it (I don't expect that) then regulations do need to change. Hopefully in a productive way.