In the first example, which you quoted, they ended up allowing for greatly more variability than intended, leaving the regulator vulnerable for exploitation. The author speculated as to what sort of exploitation might have occurred, but did not state that it did.
The rest of the examples had nothing to do with the specific relationship between standard deviation and sample size, but with the more basic fact that a relationship exists. This observation is arguably the more important one, and is poorly argued in the chapter. It's also why some people always demand error bars, though I personally prefer plotting individual data points where possible.
The last example, while interesting, had very little to do with the equation (despite a claim to the contrary), which makes me believe the topic was an afterthought.
The rest of the examples had nothing to do with the specific relationship between standard deviation and sample size, but with the more basic fact that a relationship exists. This observation is arguably the more important one, and is poorly argued in the chapter. It's also why some people always demand error bars, though I personally prefer plotting individual data points where possible.
The last example, while interesting, had very little to do with the equation (despite a claim to the contrary), which makes me believe the topic was an afterthought.