Of course the borrower is to blame - they asked for the loan in the first place. The bank didn't come around to their house and force them into a loan under duress.
However, my opinion is that the bank should be pointing out the dangers of the loan they are taking out - not assess whether someone is stupid and then tell them, or assess whether someone seems quite bright and don't tell them. If there is a risk, tell them about it and let them make their own decision! If they then go ahead with the loan, they go ahead with the full facts in posession.
Of course, it isn't in the banks' interests to point out the flaws of their plan (unless they think the plan is hideous to the point they won't get the return) which is probably why it doesn't happen like that.
Whether you think the analogy is ridiculous or not, I don't really understand why people disagree with a bank pointing out genuine flaws in their repayment plan before letting them sign! If they ignore this and continue to sign, good on them, and good luck with it. My point was that giving money to somebody that might not know better, is unethical. If you think they are stupid for not knowing better, then so be it, but it still doesn't make it right!
Anyway, I've said my piece!