Well, like you said about China, "I have to say I might agree with [your] philosophy, if not [your] execution."
Like Typhoid said, limiting paying customers to only so many hours a day is asking for a rankling. It won't be taken well by pretty much anyone in the community, even if it's meant well. Not to mention you're just going to cause the people who really want to play for as long as they want to find workarounds and so the whole thing will be a lost cause from the beginning.
I do think you're right that industry and the companies making the games need to take an active role. My suggestion -- how about putting warning screens that pop up every time you logon, ala Wii warning screens? Make them big, obvious, and non-skip-able.
There's precedent for that in other Pigovian or "sin" items in other industries, such as cigarette and alcohol warnings. You let people play as much as they want without enforcing an arbitrary time limit, but you also get the information out there to every single person playing that playing for long hours at a time is dangerous to your health and could
cause death.