Does A Kosher Resraurant Require Hashgachah (Supervision)?

The Jerusalem Post carried this article about a restaurant whose owner decided for ideological reasons that he didn't want rabbinical supervision. Speaking about his restaurant in the city,

Owner Noam Frankforter, an observant Jew, says that the restaurant is kosher and closed on Shabbat, but he chooses not to have a teudah for ideological reasons. "Part of the point is that I am trying to break the sense of alienation, distrust and suspicion that exists among people in today's society. I say to people who come here that if they try to get to know me, they will realize that I keep kosher."

So, is he right? Does he really need hashgachah or not?
In one sense, he's correct. Let's say that you walked into my shul Shabbat morning out of the blue. Seeing a newcomer in shul, I immediately invite you to join me in my home for lunch. Can you eat there? If you think that I'm shomer mitzvot - that I observe Shabbat and the rules of Kashrut, you sure can. You need not say, "Well, I'd love to join you. But who's your mashgiach?" That would sound kind of ridiculous. (Although I would get the occasional call asking me about the observance of a particular member and whether I felt someone could eat in their home.) In private life, halachah grants normal, observant people a chezkat kashrut - an assumption that people observe the rules of Jewish life and wouldn't intenionally serve their guests non-kosher food.
In principle, the same could apply to restaurants as well. Truth be told, if someone you know opens a restaurant and you trust their kashrut, you don't need a rabbi to tell you that it's OK. Halachically, you can eat there. But then there's the practical, real-world side of things.
First and foremost, how well do most people know the owners of restaurants? Not that well, to be honest. At most restaurants that I eat in, I don't have any idea who owns the restaurant and what his level of kashrut is. But there's a more important factor in play: money.
When someone invites you for lunch out of the goodness of his heart, he wants to welcome you, serve you good food, please you. But his livelihood is not on the line. Whether he feeds his children and sends them to day school has no bearing the level of the kashrut of the food that he feeds you.
Not so in the kosher food business. There, it's business - not pleasure, and money can cause people to make all sorts of bad decisions, all while finding very legitimate and real justifications and excuses. He might be the frummest guy in the world, well-known throughout the entire community, but with the proper set of circumstances, even the most upstanding person can find himself cutting corners. Anyone remember the Monsey meat fiasco? The OK published this retrospective, which explained that,

I spoke to someone who was involved in certifying the store, and asked him if there was a mashgiach tmidi onsite. He replied, “The owner was an orthodox observant Jew. How should I have suspected he would do this?” It is natural for us to want to trust a business owner when he seems to be a G-d fearing Jew. But we must bear in mind that every business owner is a “nogeiah bidovor” and has a vested interest in the success and profit of his business. This interest could lead anyone, chas v’sholom, to be tempted—especially when he faces other stresses in his life. So it is imperative for the kashrus agency to monitor strictly, even when the owner is a religious person.

I know personally of cases where someonne - in whose home I would eat - made compromises in kashrut in his/her business that they would never tolerate in their own homes. It's just a fact. What if a kashrut mistake would put your friend out of business? How many of us would independently make the right choice in that situation? Even when you know the person, do you know them as a businessperson? Are you sure that they would never cut corners, even at their own expense?
You might be, but I'm not. Which I why I always, always ask for a kashrut certificate. And if someone tells you he doesn't need it, something smells funny.