Too much FUD.
While I don't recommend ARMs for the typical customer, they can be very beneficial for the savvy person in the right market environment. Just because a loan product exists does not mean that it is right for everyone. I don't like minivans, for example, but that doesn't mean I would press for legislation to have them removed from the marketplace.
Next, suppose you bought a house a 3 years ago, it appreciated 10% each year, and then is down maybe 5% off that peak now, then you're still up 28%. OMG what a terrible investment!
Finally, the biggest losers here and the biggest fault (if fault is necessary) belongs to those buyers who were most greedy. There was an irrational expectation that home values would continue to appreciate at a rapid rate forever. In the last couple years, a large percentage of people buying homes were talking about nothing but the profits they were going to make. Many would refuse to take fixed rates even if their loan officers tried to talk them into it.
So really, everyone, quit talking about what most of you obviously don't know anything about. It was bad enough during the boom, it's worse now. If this downturn should teach your typical consumers anything about the housing market, it's that they really don't understand it, and that in the future they should approach with greater caution, more actual education, and less arrogant overconfidence. Sadly, I don't see that happenning.