I certainly don't think flying displays should be banned. I enjoyed them when I went to Farnborough in the late 70s and early 80s, and I enjoyed them today. It would be very sad indeed only to see historic aircraft as museum exhibits.
But, flying displays have risk: risk for the pilots, risk for the spectators, and, as yesterday's events have shown, risk for bystanders. That risk, especially for spectators and bystanders, is small but not negligible. Remember, risk is defined as the product of likelihood and severity of the consequence, and the consequences of something going wrong at an airshow can be very bad indeed.
You deal with risk in various ways (sometimes called the PRAT model):
Prevent - the only way to prevent risk from air displays is to stop doing them.
Reduce - you reduce the risk by making incidents less likely (careful preparation) and my mitigating the consequences (safe display boxes).
Accept - by and large the risk to display pilots, having been reduced as much as it can be in the circumstances, is accepted.
Transfer - typically by insurance, but whilst this is appropriate for purely financial risks no amount of liability insurance is going to make airshow accidents publicly acceptable.
In short, the only real way, short of stopping air displays (and again, I would hope that never happens) is to reduce the risk. We've done a lot to reduce the risk and I think the statistics since Farnborough in 1952 speak for themselves. But, in light of this accident and the Gnat crash three weeks ago, I can well imagine that there will be pressure on the relevant authorities to look again at how we regulate displays of those aircraft that pose a higher risk in the event of accident, and that will include fast jets.