I understand what you're saying. I just think that the benefit of over-protectiveness (no need for heavy-handed regulation to prevent some deaths) isn't enough to counteract the lost benefit from, for example widespread comfort with chemistry and chemicals. The level of risk-aversion is too high.
As an aside, I don't see much effective difference between a legal crackdown and one caused by fixing the social context.
You're saying they're being heavy-handed, but to be clear, all they are saying is that you can't market rare earth magnets as a "consumer product intended or marketed by the manufacturer primarily as a manipulative or construction desk toy for general entertainment, such as puzzle working, sculpture, mental stimulation, or stress relief". They're not banning magnets; they're banning one specific marketing of them.