The people behind LLMs believe in it so thoroughly that they are pushing it to do things that aren’t safe. So it can easily be true that it’s both overhyped and needs better regulation. The fact that LLMs can’t actually solve the problems they are being used for is, in fact, a problem that may require government intervention.
If LLMs aren't fit for the types of problems they're being used for, what would the government be needed for? Users would pretty quickly give up and move on if LLMs continue to suck at solving the problems people want them to solve.
Not if those people are "true believers". Once you get emotionally attached to the idea that something must work, you don't respond to failures rationally.
If we're delving into the realm of belief and therefore religion, pulling in the government to shut it down goes against everything that America was (supposedly) founded on.