Yes, from previous reports it was already pretty clear that the driver was asleep at the wheel (literally or otherwise). The car is not supposed to allow this; it's supposed to check for hands-on-steering-wheel and other indicators of driver attention. It would have been nice to find out how that system broke down in this case.
That's also a solved problem - Mercedes cars have "attention assist" which can figure out how attentive you are by measuring how you drive. If you are literally falling asleep at the wheel, the system will get very annoying and insist that you stop for some rest.
Of course, whatever algorithm they are using won't work if the car is driving itself, you can't judge the reaction time if all the driver is doing is holding the wheel.
One of the approaches used on long-distance buses is "track head position and angle." If you're "looking" into your lap or into the ceiling while driving, that's a fairly reliable signal that something is wrong, never mind how you're holding the steering wheel.
The technology is almost certainly there to very aggressively monitor "eyes on the road" and quickly blare alarms if they aren't. It's probably fair to say that would be a very unpopular auto feature.
They've been tweaking it pretty regularly since the beginning. The initial release had no timed events at all, and only asked the driver for hands on the wheel when the system's confidence dropped below a certain level. Then they added some timers as well (I think before this crash) and have been tweaking the situations and durations. Right now, I believe at highway speeds it's either 1 or 3 minutes depending on whether you're following a car or not. (The system has more confidence when it has another car to track, so it's more lenient there.)
