Dave360,
As someone who has project managed many industrial products and several consumer goods through both the US and Canadian electrical approval process, I can assure you that the agenda in play is nothing more than safety.
Yes the approval process can be tiresome, expensive and time consuming; however in many jurisdictions the sale and/or use of unapproved, mains powered electrical devices is illegal and not only opens the manufacturer, retailer or employer up to personal liability; but in many cases criminal liability.
Just how well the process and these laws work are the very reason that you so rarely hear of cases involving electrocution or fires of new or well maintained consumer and industrial electrical devices.
It is good that you say, “If I wanted someone to sue - I'd buy a commercial product” and I hope that ryanjmclaughlin has you sign a product liability release before you purchase one of his AC Shields. However I doubt that all of his potential customers would be willing to do the same and of course that liability release would be worthless in a court of law anyway.
The cost and complexity of the approvals process is the very reason that so many mains powered devices are now powered by external wall wort supplies. It is far easier and cheaper to purchase a preapproved power supply from a third party than it is to run your whole product through the system. Remember that only the areas or parts of your device that control or handle the mains voltage are required to be approved. So your desktop calculator, answering machine or the battery charger for your electric drill are not approved, but the external power supply and its enclosure are.
Which brings up another potential issue with the AC Shield, if ryanjmclaughlin was to seek UL approval for his AC Shield, he would need to enclose it in a case made of a flame retardant material, that provided electrical isolation. Additionally, the control circuit aka Arduino would now also need to go through the approvals process since it is attached to and controlling the AC Shield. Finally, since the typical use of an Arduino usually involves frequent rewiring and reconfiguration of the device and shield, a safety interlock would be required to prevent electrical operation of the device if the enclosure was opened and then of course, any rewiring or reconfiguration that you make would void the electrical approval.