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The real problem is that prohibiting reverse engineering is an allowable license clause.

Imagine a hammer that was sold with a license that prohibited hammering a competitor's nails.

After you sell me something you should not be allowed to place restrictions on its use.

You are oversimplifying the situation. Two sufficiently sophisticated parties having more or less balanced bargaining power, as was the case in this situation, should be free to contract according to their will and good/bad judgment.

Of course, if you are a retail consumer who had no bargaining power and agreed to a standard form contract without any legal counsel then different rules should apply to you and in such cases courts will apply the test of unconscionability before enforcing any clause.

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