Because privacy and fungibility by default make transactions much more difficult to track and they don't want to promote what's more difficult to track when they can promote what's safe. Maybe look into how the travel rule works for bitcoin vs monero. Look at how monero is treated by exchanges and regulators compared to bitcoin. It's not that complicated. Banning p2p transactions and only allowing for ETF custody would very likely backfire so you don't see very many monero ETFs.

Can't deny these points, I'm not sure how much they explain why ETFs become more or less desirable to implement from the point of view of the existing fiat system. Would you say that if monero had no tail emission and somehow rose to more prominence it would still be unfeasible to "trap" it into ETFs by marketing the store of value narrative? Would it be because of the culture or would it be directly caused by its properties?