I understand the issues, but it's not necessarily as clear cut as it seems and it doesn't hurt to look at it from all perspectives.
If your primary source of income is tourism, as is the case in the Canaries, you would want to ensure that your tourism offer meets the standards required by today's tourists.
Obviously the hotel industry is reasonably simple to control as is the legal rental market on touristic complexes of which there are many. Complexes are regularly inspected for safety and are required to provide lifeguards for the pools and receptions/security for tourists to get help if needed and deal with problems.
Private owners let their apartments out to the public on residential complexes which do not have receptions, lifeguards and more of the requirements. Whilst generally privately owned apartments may often be very well equipped there is no regulation or inspections, and as happened with Time-Share in the past, it is a sad fact that rogue traders do exist in this world.
If you ran a business which provided a service, especially to the public, you would insist all your employees worked to the standards you set - after all, it would only take one bad incident to ruin your reputation and trade.
In terms of the implications of this to private owners who have been letting then the reality is that the law prohibiting the letting of apartments on residential complexes has existed since 1995 and as always in law, ignorance is no excuse. If you are going to invest a significant sum of money in property, particularly in a foreign country it really is up to you to do the research about local laws and their implications.
Sadly it is the case that many Estate Agents pushed the sale of property on residential complexes as great opportunities to cover the costs through private letting, and some still are even today.
Conversly of course, if you were to have bought an apartment on a normally peaceful residential complex, either to winter in, or live in all year round, the last thing you should expect is the complex being used by a succession of tourists on their "jollies" wheeling cases around at 4 in the morning when you have to get up at 6 to go to work.
Nonetheless the law is the law and as Orange and others have said before, 18,000 euro fines are busy dropping through letterboxes and a lot of owners (both those who have known about the risks all along, those who have been fined, and some who have been oblivious until recently) - hence the recent withdrawl of apartments on the usual websites.
As for the potential effect on the Islands, well the bottom line has to be that they made the law in the first instance, and any effects on trade (tourism) are theirs to deal with. Now that the law is being enforced in a major way across all islands any downturn in tourism may result in a change of heart by the lawmakers, although with record numbers of tourists coming here officially, there is little sign of any effect so far.
So, it's not a new law, it is a 16 year old law, it's their country and if they choose to break it it is their problem.