I'm no scientist yet, but I'll just throw some info out. Maybe someone else can answer better.
A study done by the University of Iowa found that "resident radon exposure is a significant cause of lung cancer".
[Residential Radon Gas Exposure and Lung Cancer: The Iowa Radon Lung Cancer Study, American Journal of Epidemiology, 151(11): 1091-1102, 2000 ]
Different studies give different results. Some, like the aforementioned, indicate a significant increased risk of cancer for homes that exceed the EPA's radon regulations.
Check out this CNN article: New study suggests radon threat may be overestimated. Basically it says that most studies done on radon effects are done with miners, who have extremely high exposure. His study was published in Proceedings of the National Academy of Sciences of the United States of America, Vol. 96, No. 1, Jan. 5, 1999
I have access to the journal article if you want it.
Sure, walking to your mailbox in the won't harm you. But if you lived outside in the sunlight all the time your skin cancer risk would go through the roof. Living in a house that has decaying radon you probably had a much higher exposure to it than someone who encounters trace amounts in rocks and dirt. The issue probably wasn't that you're being exposed to it--I'm being exposed to it everytime I help my grandma with her garden--rather it was how much you were being exposed to. The EPA obviously felt it was too much. Whether or not they are right is up for debate.
I'm sure the radiation scare could be (and maybe has been) used for scare tactics. But what advantage would the government have for scaring you out of your home, unless they needed the land for a road or waterpipe or something. I gotta run to class, I'll try and find some more info later.