I mean the FDIC is an insurance program, if it extends insurance to entities that haven't bought in their risk profile changes.

I agree. But I think the issue is that the FDIC is providing pass through insurance but also now clarifying in an unexpected way, that only failures of the underlying bank trigger insurance coverage. It may be technically right but it has many implications that are negative. To the everyday person it’s also perverse that highly connected rich people, like VCs tied to SVB, can get their money protected beyond any insurance limit based on their power, but poor individuals just have zero influence.