Why would we allow a private craft to be more dangerous? They probably will be, but because they will be soon be subject to even more strict rules, and sneaky things will have to be done to compete in that environment (see the financial system).
When the person making the rules (the government) is no longer subject to the rules, but held responsible when they're broken, do you think they'll get looser or stricter?
And now not only does your company have to obey safety laws or whatever else applies, you've got insurance companies, shareholder lawsuits, and so on.
The Challenger/Columbia astronauts are (correctly) treated as heroes who sacrificed for the greater good. The Space Inc. astronauts who die will be considered victims of corporate negligence.
I have full confidence in SpaceX having safety at the fore-front of their manned spaceflight program. If they have a fatal mishap and loose the crew, the consequence is that they would effectively be out of business. They would go Bankrupt.
Loosing 7 lives is a tragedy. For the CEO, knowing loosing those lives will cost the company everything, they are going to pay more attention to safety, than a government bureaucracy.