This stands out to me as a problem that mandatory liability insurance would be well suited to. Make everyone liable for damages to people and organizations harm

This stands out to me as a problem that mandatory liability insurance would be well suited to. Make everyone liable for damages to people and organizations harmed by illegal use of their unsecured computers. Then everyone who has an internet-connected device has to purchase liability insurance. They would be able to choose between expensive policies that impose no surveillance or restrictions, or purchase cheap policies that require running surveillance software, or submitting to regular security audits. Most individual consumers would probably end up with cheap policies that just require them to use devices that receive timely security updates from vetted manufacturers and run behind typical home internet firewall rules.