Cynical view mode
The old guard of European airlines wanted to force RyanAir to have the same problems as them and got their pals in the EC hierarchy to pass this weird legislation. They must be very pleased.
I thought it entirely reasonable for RyanAir (and other LCCs) not to pay hotel and food as that was part of the bargain basement price.
Now FR will increase prices a bit and make everyone pay - like they did for wheelchairs. Had the old carriers left FR as it was, then more people might have thought it worth the while to pay extra for what they offer. Now that FR have to offer the compensation - but still at much lower prices - they are stronger competition not weaker.
I do like the law of unintended consequences and hope that the big boys are very pleased with themselves.
I sit to be corrected.