Exactly. Chinese friends tell me "Chinese" food one finds in Chinatowns in western cities is heavily adapted to western tastes and nothing like what is eaten in China.
I have a hunch that the 'Tso' is actually a corruption of 'sauce', meaning instead of being named for a military general, 'general' is the name of the sauce.
What laws are these? I find it strange to hear anyone claim that US laws determine what is made and sold as Chinese food. There are some laws regarding food safety, but they apply to all foods.
This is probably not what either of you meant, but until 2005, it was illegal to import sichuan peppercorns. This resulted in a lot of dishes missing a fairly important taste, even in otherwise authentic Sichuan restaurants.