I'm going to risk weighing in from the perspective of a background in physics (as well as avionics). Some of the physical observations here read to a physicist how aviation articles in the common press read to pilots. I think it's important for pilots to understand the mechanics behind this topic.
The power level of "high power" diodes purchased by consumers is typically in the tens to hundreds of milliwatts. Inexpensive visible light diodes which claim to be several watts are invariably mis-sold - I come across them now and again and measure them with a thermal effect laser power meter. I think it's reasonable to generalise that a laser pointer bought on eBay is unlikely to be more than a few hundred milliwatts of output power. It's worth noting that most (almost all) cheap visible light lasers are pumped by a much more powerful IR laser and if an appropriate IR filter is not installed the output power will be much higher than that of the visible component alone. IR light will pass the cornea and heat up the retina as easily as most visible light. Only as the wavelength moves into UV does the effect switch from retinal to corneal damage.
That's not to say that somebody who genuinely wishes to incapacitate a pilot might not have purchased a high quality visible laser with several watts of output power. It will have cost them several hundred pounds and I suspect the attackers under discussion here do not fall into this category.
At close range the output of even a low powered diode in the visible spectrum is very dangerous to sight. An 808nm (green) 50mW laser shone at close range into the eye for more than a few milliseconds will could inflict permanent injury. Laser pointers around 200mW are widely available and these could easily cause loss of sight.
Exposure is considerably reduced by distance. For incoherent light (such as a bulb) the power of the light reduces by the inverse square of the radius, which is not true for a perfectly coherent laser source. An ideal laser will have the same power at any distance because the energy does not diverge. However there are no ideal lasers, and the diodes one might purchase on eBay are very far removed from scientific grade. As the beam diverges a smaller area will contact the retina so the exposure is therefore a function of the radius of the beam at the distance of contact multiplied by duration.
At cruise altitude, or well into the climb, or early in descent, the distance of throw is substantial so the beam radius is large and the ratio of the beam area to the retina area is small. Furthermore the duration of exposure is likely to be short because it is difficult to manually track a moving target even with quite a shallow angle of incidence. As such this exposure is very unlikely to cause any damage to the retina - much higher exposures are experienced in night clubs when scanning the crowd with a moving laser (and those exposures are also calculated to be safe). I would suspect that the greater risk to flight safety in these circumstances is the surprise of the momentary flash of light, and the distraction that could result from this.
I would be far more concerned about exposure closer to the source - shortly after takeoff or on final approach. Beam radius at these shorter distances could be as little as a few centimeters even with a low quality source. There is certainly some risk to eyesight in these circumstances, whether that's permanent scarring of the retina or temporary dazzling (which can last for quite some time and is extremely disturbing). The latter effect is possibly why pilots are reporting prolonged exposure in the cockpit, even though it's unlikely that such tracking could be achieved manually. A 10ms exposure at relatively high power could easily dazzle a victim for several seconds.
In the case of the Virgin incident, I feel the co-pilot would be extremely unlucky to have suffered any permanent injury. That doesn't reduce the impact of the distraction and the distress that uncertainty of the consequences must have caused. I feel that flight crews should receive better training on these matters (beyond the occasional bulletin) which might better equip them for decision making during such events. During critical phases of flight it seems entirely appropriate to handle a laser strike as sudden incapacitation.
As for banning lasers - there's already categorisation and control for laser products. It's a matter of enforcement not legislation.