[AnthonyMouse]

In general this kind of excuse is used by incumbents to pass laws to thwart competition.

You have some regulatory framework which has already been created by captured regulators, so it has a couple of rules that it ought to have (always the ones pointed to in order to justify it) and then others that exist merely to exclude competitors or make sure fixed costs are high enough that only large incumbents can meet them.

The latter set of rules are unreasonable so the market finds a way around them. The incumbents then call this a "loophole" and insist that the competitors be forced into the entire framework rather than just the subset of reasonable rules they'd be able to satisfy without being destroyed. Which destroys them, as intended.