Personally, I think the FAA got it right on ultralights when they essentially said, 'Eh, go ahead and kill yourself if you want to. Just don't do it over a populated area where you might take someone with you..." No, I don't want to see people running out there and killing themselves. I do want to see people have the freedom to experiment, and have the freedom to do something stupid if they wish. I believe in Darwinism.
Now, I don't think the FAA got it right on the 254 pounds and 5 gallons. Being a fat guy, I cold use a 400 pound or so empty weight with 10 gallon allowance. Max and stall speeds I can live with.
Getting back to the kids in the video. I think they're very foolish to fly that thing the way it's designed. No redundancy for safety. No shrouds for the blades. And it's pure idiocy to fly it around other people where someone besides themselves could get hurt. But, I'd defend their right to be idiots, so long as they don't take anyone with them...
Mark