It's one of those cases where I think something should be done about it, but there is nothing that can be done as any such set of laws would be subjective and rife for abuse.
The big issue of course being that while in cases like naming your kid something stupid like "Venusian Crater" is obvious, all of the same arguements could be applied to very ethnic names outside of their home culture, and that opens all kinds of doors for bigotry. Not to mention that what is a bad name in one case, is not going to be a bad in another. For example "Sue" is a fine name for a girl, but not a good one for a boy.
Laws have to be very specific, and unfortunatly laws can't rely on something as unspecified as "common sense" especially as the world changes.
Perhaps at some point, some lawmaker will come up with a way of making/wording a law that will work for things like this, but I don't think it will happen. The price of scarring one kid for life is low compared to the damage that can be done if laws to prevent that wound up hurting millions of people.
As a side note however, I do think there is some potential here for local laws. See, addressing the issue federally would cause problems by trying to hit everything with too broad of a brush, I think people in a local area could more fairly decide what is a reasonable name for the community. If your in Chinatown for example, a Chinese name is fine, if your in the middle of say Rural Kentucky, well not so much. This itself could lead to abuse but could potentially work since it would allow differant groups of people to use differant standards while avoiding anything too ridiculous.
Another option off the top of my head might also be requiring names to be reviewed and approved by a commitee for example. Not as bad as it sounds, but in the hospital or town clerk's office the handfull of people there who are going to process the paperwork might get a say. Parents should come up with a few potential names, ahead of time, and in most cases I doubt there won't be a problem. I think this will get rid of a lot of stories like the guy filling out the Birth Certificate saying "you know, today we had some parents who named their child [pick stupid thing here] and I couldn't believe it". That guy could instead go "no, really your not naming this kid Moondoggie".
But again as I originally said, I don't think anyone will come up with a universally fair system, as even those ideas have tons of problems, thus I imagine it will never stop.