As I've been working in the industry for many years now, I'd say that all these stories exist for several reasons:
1. News sites use them as clickbait articles. Everyone wants a sob story and everyone feels superior when they read about someone who made such terrible mistakes. So, I believe that such articles bring lots of traffic and engagement.
2. It's a way gambling authorities use to warn customers of the possible harms of gambling. And I agree that this can be a dangerous hobby, but honestly I also think that every hobby can be expensive. I have a friend who's constantly buying some limited edition books and expensive board games. Some of those cost like $200-$300 and he has at least 50 board games. He doesn't even play most of them. In gambling, you at least have a chance to win something I guess. This is just dead money sitting on a shelf.
3. Religious and social taboo. This was mentioned by many, so no need to further expand on it.
4. There are much more unhappy stories than happy ones. Though, if you follow iGaming news, you'd know that there are actually frequent juicy wins. They just don't reach mainstream media as often.

I don't personally think it's to prevent people from making money by becoming smart gamblers. Most people don't even believe that someone can become rich from gambling. Plus, this strategy wouldn't make sense for operators as they make money anyway. So, I'd say the reasons listed above are the primary ones for the bad reputation of gambling.