should the government not actually be 'trying to stop' Bitcoin with more regulations (I know sooner or later they'll run out of it), rather than creating digital currencies that will work (and be printed) almost in the same way as their fiat currencies
Maybe they've realized they can't. They can regulate centralized exchanges as much as they want, but they can't stop people trading peer to peer. They can force KYC on every online exchange, service, and web wallet, but they can't stop people from mixing their coins and holding them themselves. They can force some mining pools to exclude certain "blacklisted" transactions, but they can't force every mining pool to do that (not least of all the ones in other jurisdictions). They can force payment processors like BitPay to collect KYC and track their customers, but they can't stop merchants from just accepting bitcoin directly. I'm sure they will continue to pass ever more ridiculous regulations, but nothing they do can stop me from holding bitcoin myself and sending it directly to another party in exchange for goods or services.
So perhaps they hope that by launching CBDCs they can simply entice people away from bitcoin altogether, rather than regulate against it.