These companies already have internal processes and mechanisms for handling these problems, which they impose in addition to FAA procedures.

The purpose of the FAA regulations and the ban in this case is to address pilots operating outside of this system. Essentially all commercial pilots employed on passenger flights have hundreds of hours of flight time, as an implicit condition of even getting such a job. The air taxi startup would have allowed pilots with almost no flight time (~40 hours) to take on passengers, which is an untenable safety hazard, given that new pilots are the cause of most accidents. It's not that these pilots have no regard for their own well-being; it's that they don't know enough to even know when it would be dangerous to fly.