The kind of protection people want: their in high-risk investments being protected as if they were in low-risk investments. They also want to eat cakes but still have those same cakes.
They don't apply to all situations, and your criticism is somewhat valid for many crypto cases, but between crypto and traditional finance it's true that regulators can be too heavy-handed on some areas in crypto while being a lot more lenient on say people who run a company to ground in a leveraged buyout.