Some governments have already done that long time ago and some of them have also gone through several phases of unbanning and banning Bitcoin. Now the status of Bitcoin is that many countries or governments rather have embraced it. They have already proven that Bitcoin wasn't really a scam or bad but it can be an asset to help them and their country to improve.
Bitcoin being a decentralized crypto could mean that there is no way for any governments to regulate it and maybe that is the reason why they just banned it directly. Right now, governments do only come up with their own crypto which is called CBDC which they can regulate easily.
In the case of the state I haven't seen a bigger opportunity being exploited by some countries as done by El Salvador, the problem the state sees is not the nature of bitcoin which is a scam. But the growth of bitcoin can threaten fiat currency, so they continue to enforce regulation as a limit that will limit it, although in general it doesn't work and doesn't affect bitcoin in any way on its way.
The purpose of making regulations is only to limit not to regulate, because of the nature of decentralization even Satoshi Nakamoto cannot control bitcoin and CBDC as a substitute which they consider comparable despite many shortcomings and completely different from bitcoin.