This fishing practice has been banned in New Jersey and South Carolina, and partially banned in Delaware. It remains legal elsewhere in the United States.
Personally, I'd much rather see the fishing-bait use reduced than the biomedical blood use reduced, since the fishing-bait use seems less essential. Of course, I'd love to see the synthetic option reach the same level of trust that the blood now enjoys, at which point both reasons to harvest Horseshoe crabs could be reduced.
If we're killing 175k crabs per year, it'd still be better to use their bodies for bait (if the alternative is to throw them away, and kill another 175k + the rest for bait).
No, non-medical fishing is banned, they are still harvested in NJ for crab blood.
If we switched to using the synthetic alternative, fishing would be allowed again and we'd be catching them to grind into bait and fertilizer like in the old days.