The problem is a certification problem (or lack of) and not a hardware/firmware problem. They never bothered with FCC approval and just relied on saying that it was the responsibility for users to ensure they complied with local regulations on their website. This was not adequate for the FCC. I have a few issues with this.
1. The OrangeRx DSMX/DSM2 modules would near certainly be compliant with FCC regulations, but it would appear HK didn't want to spend the money to have them approved. Maybe they thought that as they were selling them from Hong Kong, the FCC regulations didn't apply to them? Or is it that they would have had to release the source code for the modules which may have incriminated themselves if they were using stollen Spektrum code (as it's widely alleged). Either way, Hobby King knew what they were doing and decided to take the cash rather than do it legally as far as the FCC was concerned.
2. But isn't the FCC also being arrogant in applying their regulations on a company based in a foreign country? The DSMX/DSM2 modules were only ever sold on the HK based international site, that is based in Hong Kong and hosted on Chinese servers. What makes the FCC think they have any jurisdiction over the HK international site?
3. This applies just as much to us in Europe as it does the USA. If I understand correctly, all rf emitting products used in the EU should be tested by a EU recognised notified body and can't be self certified as most other products can. HK haven't had them independently tested/certified, so it is the responsibility of the importer (me and you) to ensure they are certifified. And this wouldn't be technically possible as the DSM2 protocol they provide would not meet current EU directives.
4. I don't think it will be too long before the FCC go after Jumper transmitters and their 4IN1 modules either. They have valid FCC and CE approvals, but if you read through the certification, they only mention the CC2500 chipset and no mention is made of the nRF24L01 or CYRF6936! So using FrSky or Futaba protocol is OK, but not DSM2 or DSMX! Where will it all finish?