Nah, you don't need to ban anything. Just force the rule, that if company sells self driving, they are also taking full liability for any damages of this system.
It’s not a conundrum as much as an implementation detail. We’ve decided to hold Waymo accountable. We’re just ticking the boxes around doing that (none of which involve confusion around Waymo being responsible).
Personally, I'd argue that if the AI killed someone due to being incompetent (as in, a human in a fit state to drive would not have made this mistake), the punishment should go to the corporation that signed off on the AI passing all relevant tests.
The nature of the punishment does not necessarily follow the same rules as for human incompetence, e.g. if the error occurs due to some surprising combination of circumstances that no reasonable tester would have thought to test, which I can't really give an example of because anything I can think of is absolutely something a reasonable tester would have thought to test, but for the sake of talking about it without taking this too seriously consider if a celebrity is crossing a road while a large poster of their own face is right behind them.
By this logic, then we should also create a rule for regular, non-self-driving that says, if you have a car accident that kills someone, all your wealth is taken away and given to the victim's family. If we had a rule like this, then "you'd probably see much safer driving". Are you willing to drive under those circumstances? I am sure you will say yes, but it does not make your suggestion any less ridiculous.
I can think of one example where something similar works. The requirements from insurance companies on airline pilots are considerable tougher than the government ones because they are on the hook for ~$200m if they crash.
A big reason car companies don't worry much about killing pedestrians at the moment is it costs them ~$0.
About half our road fatalities are pedestrians. About 80% of those are intoxicated with alcohol. When you're driving at 40mph, at night, and some drunk guy chooses to cross the road, no amount of safety features or liabilities can save him.
Sure, cars can be safer for light collisions with pedestrians where the car is going slowly. Especially in the US where half the cars have a very high hood. But where I live the problem is not safer cars, it's drunk pedestrians.
I wonder how a Waymo would do with your drunks? Really the answer for that is probably more a different road layout so the drinking is separate from the traffic. I live near Soho in London which is full of drunk people in the streets but most traffic is blocked off there or doing 10 mph.
We cannot even properly ban asbestos, expecting people to die first is just having a realistic perspective on how the US government works WRT regulations.
That's a legal non-starter for all car companies. They would be made liable for every car incident where self-driving vehicles were spotted in close vicinity, independently of the suit being legit. A complete nightmare and totally unrelated to the tech. Makes would spend more time and tech clearing their asses in court than building safe cars.