Yet it appears a significant reason for the emergence of this phenomenon is the regulatory statute of the FAA which elevates arbitration to the same standard as contracts, and preempts state decisions on their enforcement, and moreover has had its restrictions (i.e. ability to waive class action in arbitration clauses) subsequently reaffirmed by SCOTUS.
As such, this has only created more surprises. But it's a folly to call it a failure due to lack of regulation, since this all takes place in an environment that is already heavily, and in fact often incomprehensibly regulated. The verbosity of standard-form contracts isn't incidental.
That's a very misleading characterization. The purpose of the FAA is to eliminate judge-created exceptions to enforceability of arbitration contracts. The premise is that arbitration clauses should be enforced the same as any other voluntary contractual provision and that the judiciary shouldn't be allowed to give such provisions special treatment. The verbosity of form contracts has nothing to do with regulation or the FAA, except to the extent that they waive "default rules" which often protect consumers.
