[mandelbrotwurst]

> High prices induce production that would not have occurred otherwise. They also curve demand downwards so that only those who really want the item will get it.

These are good points.

> There is little reason to outlaw price gouging save for humans have a disgust response to people who profit from tragic events.

There is at least one reason:

Setting a price ceiling means that the distribution of the good will be tilted more towards those with less financial capital than it would be if the price were allowed to climb further. I believe this is a point that many care about for a number of reasons.

I'm not arguing that it's better if you are optimizing solely for maximizing total utility received from the supply of the good, but I would question whether that is necessarily the right course of action.