You're confusing cause for effect. What you call the 'iron ring' is caused by - is the product of - an abdication of political responsibility for aviation regulation.
Your 'iron ring' didn't force successive ministers to abdicate all practical responsibility for aviation regulation to CASA. It was a deliberate choice of successive ministers. The 'iron ring' merely seized upon the opportunity presented by the stultifying mediocrities that have presumed the title "government" over the last couple of decades. Someone has to be the last bastion between the innocent public and aviation industry anarchy.
The "industry" being "timid" is not the problem. The problem is that most of the "industry" votes for the same side: The Laborials.