You've kind of hit the nail on the head. Money laundering is illegal because the only time you need to launder money is when that money was obtained through illegal or fraudulent means. Because you launder money so the government is aware of the money, but not where it originated from. If you obtained the money legally, "laundering" it is just you willingly choosing to lose money.

It's kind of why there is also a way for you to claim illegally obtained income on your tax form as well.

They may not have proof you committed the crime, but they have proof you tried to hide the crime. So if you make that a crime as well, you get them anyway. The goal isn't to be accurate, the goal is to stop criminals.

Also, by knowingly helping someone launder money, you are kind of aiding them in their crimes. So it's a way to get accomplices as well.