Local/free scripts should be unregulated except for security. Users who wish to buy a reliable script from professionals know to turn to the SDN. Having even the lacking, but still existent free/local scripts draws more general users to the website. As an example: a new User registers and downloads the bot to see what's up. He or she uses a free, simple bot, that performs okay. The User then purchases a more robust script once seeing that the bot and community itself is capable of providing real quality.
As for a premium law crafter losing sales to local/free scripts that also do laws -- make the premium script better. Simple as that. Add more functionality and reliability than the other and there's not a problem. A goldfarmer is going to buy the premium, better script, and non-goldfarmers most likely aren't going to buy VIP or a premium script anyways. Such light users, running a free script on one account, are irrelevant and any argument concerning them is invalid.
I do agree with OPs thoughts on SDN scripts, though.