That is the compromised Bitcoin users have to give if they wanted the government to adopt Bitcoin. That is showing people that they (the government) still has the authority when it comes to finance system.
I understand and I agree that it's a price bitcoin is paying for becoming a currency. But it is worth it if in the end every bitcoin transaction will be fully regulated, you can't buy it without KYC and they probably will make us send/receive it through their channels to analyze transactions.
And secondly, what is the point of adoption if people think of bitcoin as an asset and will just trade it causing fluctuations that will make it impossible to use it as a payment method?
just imagine that business that accepts bitcoin will be recalculating the price multiple times a day because bitcoin has moved 2-5%.