Yes, freak circumstances can happen. But planes aren't required to survive a collision with the ground: if they were, there would be no planes. Cars aren't required to survive, without deforming, collisions with a brick wall at 60 mph. Trains are already safer than airplanes, and much much safer than cars. If, as a result of these regulations, there is no train service, and people are forced to drive instead, are we really  improving safety? Unless you were talking about the insurance issue, in which case that's still not nearly $700 million dollars worth of damage. Probably less than $70 million, in fact.
I seem to remember a quote of £2 billion for the accident from the insurance companies being bandied about. I was surprised by how high this number was, but have no idea how accurate it was, as the quote was from the first day of the accident, not a considered quote after all the details had been found out. I suspect £2 billion would be the figure needed to correct the problem of upgrading all crash barriers by railway lines.
Basically, what it comes down to is this: the insurance requirements of the railroads are the equivalent of requiring all planes to be insured against crashing into a World Trade Center.