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Yes, anyone should have immediately noticed it was a regressive subsidy for those that are more wealthy at the expense of the less wealthy.
As usual, the program was too specifically targeted at certain symptoms of a problem rather than the root of the problem itself, and was therefore plagued by all the problems you listed.
The higher up the chain of authority goes, the less specific their actions should be. The federal government subsidizing new "fuel efficient" vehicle purchases for the wealthy is so far outside the scope of the top level of government that we should have canned anyone that voted for it in the first place. By allowing our politicians to act stupidly and not pay the price for their incompetence and arrogance, we ensure stupid ideas will be put into law in the future.
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