My objection to the law was it was hastily done and poorly thought out. There is no reason redundant testing or testing on materials that just aren't applicable needs to be done.
Personally, I would prefer to see a labeling law. For first sale in this country, a product must be labeled as: tested for lead, phthalates, etc. and are at safe levels for children; tested above these levels; nature material inherently lead and phthalate free; or were not tested. Lots that are tested would recieve a unique identifier number that would be part of the label (making recalls easier too).
Assemblers/manufactures that only used products sold in the US could instead file a form listing each material used in each lot as well as the labeling info provided on the products they used. (Of course, only products that passed testing or are inherently safe could be used in making the final product.) They would then be allowed to label the products with a special "made from safe tested materials" label.
Of course, OOAK items would be still be a problem if you want labeling, but having the ability to label "not tested" should work well for many.
I think this would solve the controversy of testing, both the cost as well as the issue of defining what items should be tested. This would also allow parents greater ability to fill their homes with safe items, including safe items not considered children's items (like couches, cookware, and mom's jewelry) that their children may well get into.
While protecting children (and all people) is important, I would rather see the government work towards empowering the consumer to make informed decisions than legislate every single facet of our lives.