In a perfect world, the systems described in this article would work well. However, as much as I worry about government regulations, I do not trust a system where potential lawsuits can be calculated into the bottom line as a cost of doing business and profits can be more important than human safety.
Here's another somewhat out of date article that's nonetheless rather appropriate (skip past the irradition discussion for the appropriate part):
If government regulations are not enough right now, think of the millions of dollars the cattle industry has spent in recent years trying to prevent additional regulations. That, in my opinion, shows they aren't about to do better than the government if allowed to regulate themselves. Here's a recent example:
The most aggressive of the USDA reforms would ban from the nation's food supply cattle that are too injured or too ill to walk. Congress has repeatedly considered a similar measure but it never became law because of opposition from lawmakers from Texas and other cattle states.
While I think this isn't much of a response from the USDA, I find it troubling that lawmakers (likely under the influence of lobbyists from the meat industry as well as meat producing constituents) have spent time trying to prevent the banning of cows too sick to walk from being slaughtered.
And if the meat industry cared, why not test every cow before slaughtering? The BSE test is a whopping $13, working out to about 2 cents per pound of beef. Many other countries test every cow before slaughter and have for years -- but there are probably government regulations behind the testing.