Yes, I imagine that one has to be careful with these... At any rate, I woulda thought Dow, with all of its idiosyncrasies, isn't a prime candidate for these strategies in the first place.
Yes, while arnd here you have some ineffective EEA rules about depositor protection, but the idiots can come up with the framework for a banking union, still...
I am sure you've seen FDAXHunter's paper on dispersion here:
http://www.nuclearphynance.com/User%20Files/2/Dispersion%20-%20A%20guide%20for%20the%20clueless%201.1.pdf
Yeah, to make it into a very public, very large long-term trade was kinda insane, IMHO... Like you say, that's just paining a ginormous bullseye on your back and inviting everyone to try their luck.