As indicated in my first comment, the article is focusing on the regulatory problems first; as you note, filing with the SEC with a 120 day delay is awful. Letting the regulators of all the states into the game might be worse, in that I'm sure angel investments would be de facto or de jure outlawed in many states (the state residence of the firm and/or of the angel).

Massachusetts didn't let its residents invest in the Apple IPO: http://news.ycombinator.com/item?id=1303133

But thanks for pointing out that often overlooked detail WRT to primary residence, as that will knock a whole lot more angels out of the game.