I think I'm with the 'nanny state' on this one. Risks are too high - mostly to life and limb via aircraft interference - but also privacy intrusions and the general nuisance factor. I'd say terrorism is also a factor (a convenient bomb delivery system) but terrorists aren't going to abide by any drone operation rules anyway.
Drones have some excellent uses (aerial video/photography, video/sensors in places people can't go, etc.) but there's no rational reason that those useful purposes can't continue unabated with significant restrictions in place.
I thought about this a couple of days ago ... "IFF for Drones" ... except it'd be a different system to IFF. I haven't read the BBC article yet, so I've no idea how similar/different that is. Basically, introduce a long, unique "VIN" number for every drone sold, preferably worldwide. Embed it on a small (maybe customised) long-range RFID chip in the drone and give police, military and council rangers suitable RFID scanners to interrogate any drone they see (out to hundreds of metres - limit of visible range). Couple this with a national licensing system.
Restrict sales to 18+ (parents can still buy for their kids, but the parents take the responsibility for misuse).
If a drone is in the wrong place at the wrong time, it'd be traceable. If it doesn't have registration or no/broken "IFF" it's fair game for takedown.
We could also have police issued with electromagnetic anti-drone weapons (there are some of those available now) and we might even have anti-drone drones with, say, a net that shoots out to bring down an errant drone (although I'm sure there are better ways).
Drones confer great power on the user, and with great power comes great responsibility. Unfortunately, as with many pursuits, responsibility has to be
forced on some people.
If drones are a minor/occasional hazard now, just wait until there's 100 times more of them!