One of the main reasons is that the spread of scam is used as a result of the manipulation,goverment can not control the transactions, used in illegal activity and the government thinks it affects the country's economy but it is not the reason
i think by giving strict regulations to ico, it will filter out the quality, so competition will be healthy, and not many investors will be deceived, i think that is a good first step.
For government its hard to reach those criminals. That's why government don't want to public bitcoin and ban it. They don't want to destroy there country's economy.