Where are the prosecutions?
The decline in economic freedom comes as the government has failed to hold key risk takers accountable, some experts say. "The government has been inept in understanding the underlying facts, and bringing in effective cases and prosecutions," said Santoro.
For example, the Abacus deal and Fabrice Tourre—the former Goldman Sachs trader, found liable of misleading investors—weren't particularly unique. "Not only was it not unusual for Goldman Sachs, but it was not unusual for the financial industry at the time," Santoro said.
William Black, an expert in white collar crime, antitrust and economics, has also called attention to the government's inability to convict wrongdoers related to the housing bubble.
Black, associate professor of economics and law at the University of Missouri at Kansas City, has noted the government's failure to act, when the FBI had been warned of an "epidemic" of mortgage fraud in 2004—four years before the Lehman's implosion and the ensuing meltdown. He has testified before the House and Senate on the failure to prosecute. "I could reprise the same testimony and just change the date" to today, he said.
U.S. prosecutors earlier last month filed criminal charges against two ex-JPMorgan traders for allegedly falsifying records to cover up trading losses. (Another former JPMorgan trader known as the "London Whale" was not prosecuted, as he made a non-prosecution deal with the DOJ, sources told CNBC's Kate Kelly.)
The SEC's website does cite161 entities and individuals, charged for misconduct that arose from the crisis. But as Kelleher of the nonprofit Better Markets noted, "While the Feds are making a big splash by arresting the 'London Whale' minnows, there will be no justice until the whales in the executive office are charged." Kelleher previously worked at the international law firm of Skadden, Arps, Slate, Meagher & Flom, and attended Harvard Law School.
(Read more: Inside the end of the U.S. bid to punish Lehman executives)
The moral hazard
When the dust settles on the financial crisis and its perfect storm of causes—regulatory failures, excessive compensation, risky behavior and bad judgment—it may boil down to a crisis in ethics.
And if individual consumers ultimately can't trust institutions and the economic system, the potential ripple effects are eerie. Said Steven Currall, an ethics expert and dean at the University of California Davis Graduate School of Management, "This must exert a chilling effect on people's willingness to invest in equities." And beyond. Ironically, some consumers are returning to adjustable rate mortgages as rates rise.
Ultimately it may not be enough to have a rule of law. "We also need a culture and ethics of fair dealing and honesty," said Santoro of Rutgers. "When that breaks down, it's not good for the financial markets and it's not good for the economy," he said. "The link has been broken between Wall Street profits and prosperity on Main Street."
—By CNBC's Heesun Wee. Follow her on Twitter @heesunwee