There are plenty of systems already in place for staggered regulation. For instance, you can buy asprin over the counter, other drugs at the pharmacist's discretion, stronger drugs still only with prescription, and the strongest/most dangerous (such as barbiturates) only with an extensive paper trail.
Regulation, used lightly and judiciously, can encourage freedom and prevent serious abuse. There are regulatory systems that work (such as prescriptions) and those that are highly flawed (such as what's allowed on your carry-on luggage). Regulation isn't good or bad, it's more down to the system used and how it's implemented.