Hyperbolic extremes are irrelevant to the discussion. It'll cost a gazillion pounds to compensate an A380 full of pax for a delay just as it'll cost a thousand gazillion pounds for killing them all. The latter seldom runs the offending carrier out of business as long as they don't do it very often, and neither will paying the modest cost of an unacceptable tech delay. It's called insurance.
Regulations exist to modify citizens' and corporations' behavior toward some social good, not to punish either. Faced with paying for some level of tech delay airlines may elect to insure themselves (while making adjustments to make sure that will cost their pax a tiny amount per ticket). The result will be slightly better, safer service.
(A poster mentioned compromised safety due to employer-dictated dispatch of an unsafe aircraft. Please assure us that doesn't happen in the EU, and should it be demanded, you have a channel by which to bring it to the attention of authorities without compromising your job.)