It's not so much about the loans; there have always been higher risk loans that carried higher interest rates because they defaulted more often. It's about the way the loans were deliberately misvalued. All of these so-called instruments were packaged, resold and overvalued and wound up in some cases valued at more than 30 times the actual original commitment, and that's before payments on the original commitment had even started!
I don't want to get into a political discussion about the need for more or less regulation. To my mind this is fraud, plain and simple. These are giant Ponzi schemes, and like all Ponzi schemes, they depend on the greed of the investors as well as the fraudulent intent of the people who run them. All the people involved knew these loans weren't worth their face value because of the risk, but instead of appraising them honestly, they deliberately did the opposite in the hopes that the schemes would continue to draw in new suckers.