Well, I think
there might be laws in place on what the government must or must not do with assets that have been seized from criminals. I doubt they can willy nilly decide to simply hodl in hopes of speculation gains. Personally, I am ok with this. The Bitcoin goes back to the people and the price will go down, which means cheaper Bitcoin available to buy. Although considering the amount being sold off, I doubt it will have any kind of significant price impact.
The law can be changed to adjust this so I don't see how this is a real argument to justify this bad behavior.