There are multiple other threads where VW is being discussed.
First, the alternative is to bar people from driving their vehicles and go out and buy a new car. I can almost gaurentee you the environmental impact of such a policy would have a far greater impact than letting these people use their cars until a solution is provided. Most people can't afford new cars on a whim, especially if their old car is worthless (who can sell a car you can't drive.
I have no problem with these drivers continuing to drive their vehicles until a solution is found. They were sold the vehicles under false pretenses by VW and had no way of knowing they were non-compliant with emissions standards and fraudulently programmed. VW's hefty fines will pay for the noncompliance of the vehicles and hopefully be used to offset the damage done.
Barring everyday people from driving their cars is only punishing the drivers who are not responsible, not VW. They will likely incur reduced car values, time wasted getting their car fixed, and probably reduced car power/performance as a result of the solution. Restricting use will incur severe problems with those who rely on their car as their sole form of transport.
Until VW comes up with a solution that solves their emissions problems and fairly compensates their drivers, I see no reason to inflict consequences on the innocent owners. When the solution is unveiled, and people do not complete the recall, then they should be held liable.
The legal limit for NOx is .7g/mi. One article did the math, assuming VW TDI's produce 20x more NOx than the legal limit (VW is said to be 5-35x), 500k affected cars, and 120,000 mile lifespans. The total impact was producing 47,000 cubic tons of extra emissions in the car's life (120k miles = ~10 years average). California alone produces 160,000 tons of NOx annually.
Considering that this problem will not go on for the lifetime of most of the cars (assume 10 year lifespans) as we expect a fix, I don't see the environmental impact being too significant, especially considering the progress we have made. 47 cu. tons is an overestimate considering the problem will be resolved.
My mother recently bought a 2015 Audi Allroad, literally a few weeks before this scandal broke. The 2.0T gas engine has not (yet) been implicated, but my parents are not happy with VAG and question what else they lying about. My grandfather, now deceased, always told me never to buy or invest in VW. I guess he was a wise man! (though his reasoning had to do with Nazis, Hilter, and slave labor in VW's factories).