Well I think it's pretty clear we need a $1000-$5000 daily limit... People losing life fortunes in 20 seconds isn't cool. Whoever did this will be lucky to get their money out of dwolla. If I were magical Tux I would probably shut down the transactions.
Why? This how markets work. Buyers and Sellers are matched together. Someone was willing to buy at lot of BTC at pennies and someone else was willing to sell. BTC (like any other commodity) really doesn't have an intrinsic value, it is valued at what people say it is valued at. Since BTC is a new commodity and there are not a lot of people trading in it, the market (all the buyers and sellers) haven't really figured out what it is worth.
This is currently the wild west. The opportunities for reward are great, the risks are extreme. Deal with it. Have fun!