Because it's too easy to convince carriers to port someone else's phone number to a new SIM. I wish the carriers would address that, but that too would likely require some sort of government intervention.
In fact, intervention wouldn't have to be to change SMS. They could instead mandate a standard like U2F or FIDO2. If they really don't like those for some reason, EU states could get together and make a new standard and mandate that.
I'd be okay if they regulated telco carriers a little bit more than they already do; much more okay than with anything resembling what they're trying to do now.