A "seized asset" implies something that was stolen by criminals from their victims.
No, there are many other scenarios where this is not true.
In that case the seized asset should be given back to the victims.
In many cases this is near impossible or does not make economic sense. Should they spend $100m in taxes to track down, account and reimburse victims $10m in value? No.
The government has no right to hold on to it or sell it off for its own benefit.
Of course they do.
The law decides the right, not someone with the username headingnorth. If so then that would give government a perverse incentive to falsely accuse you of stealing
and provide them an excuse to seize your bitcoin (even when you legitimately own it and never stole anything).
You've been asleep since you have been born. Did you complain that asset seizure is possible with other assets before or you are just complaining about Bitcoin now? This incentive was always there, and it will always be here.