First thing it's just a review so the Badwater folks are overreacting.
Second, is this an NPS-wide policy to review safety of recreational events or is this limited to Death Valley?
Third, it is not "government" (with big G or little g) against the people, rather it is agency by agency, and sometimes local branches of the agency (yes down to the individual District or Park superintendent level). There a lot of ignorance if not stupidity in the statements being thrown out here in this thread and by the organizers of Badwater.
Fourth, if they actually shut it down, an event with a 37 year history without any major safety mishaps, by fiat that might be some grounds for appeal and public review (though the process of the National Enviornmental Policy Act); if not pick a new route that is not in the National Park (which I might add is the most risk aversive and top down bureaucratic of federal land agencies).
Fifth, a question. What's more prestigious, a slow ultra (say 15 or 20 min miles) or a fast marathon, or 10K say in the 5 min range for either?