Hoss-
As much as I am not a fan of playing the semantics card,
folks have put forth that the FAA doesnt REGULATE model aircraft activity, they didnt use the term POLICE for what the FAA does. So in regards to your post showing the lack of legal recourse when in viloation of their regulations, they do Regulate, they just dont have teeth in the regs against clowns with toy planes.

The FAA does control what we can do with our toys.
They have clearly spelled out things we cannot do with them
(whether it is a Model rule about 400' or general ClassA rule about anything at all being high),
have issued Waivers to some SoCal boys & their toys,
and have gone so far as to revoke said waivers for 9-11 (& reinstated them later).


Paid?
Sometimes I did construction/electrical work with some pals for friends/neighbors, and take cash under the table.
Sometimes it was a grand or two, which was over the $500 contractor license dealybob.
I surely didnt report that income from the 2 or 3 under the table jobs I did a year.
Just because I broke laws occasionally,
and on those occasions I broke laws without getting caught,
doesnt mean it aint illegal.