NigD,
The accuracy of GPS is a known thing, and wrapped into the approach geometries, so you are correct, but it is not a reason to prevent approval.
For example, the bottom of the FAA non-precision GPS approach lane is about .9 Nm wide, with the course in the center. This accounts for the maximum RAIM error at the worst place in the approach. Most GPS hits are within 100 meters, so most approaches can be kept within a 0.1 NM width. The extremely conservative airspace protection is a product of the safety built into the approvals.
LAAS and WAAS are about to be sprung. A commercial WAAS receiver will be sold next year (I know because I am on the FAA/Industry committee to determine the procedures - we are meeting again on Wed of this week!)
The FAA has been pretty good about getting this stuff approved.