One of the guys in the office talks about Model A's an T's that are being built from scratch and then sold as originals. That is fraud.
The average Joe just wants to get his project car on the road and if smog regulations make it impossible he will find a way. He doesn't mean to defraud anybody.
Seems to me that the solution here is simple: exempt kit cars and street rods from smog regulations. Generally a kit car is driven no more miles in a year than your average antique car so what's the difference? There are guys here lobbying the government to create a special "street rod" plate - I hope that it works out.