Ahhh yes [terrible thing] is [actually good] for [coin I like]. A well worn template in cryptonomics.
A bit of a loose analogy might be regulators stopping the sale of "cheese", which is not actually cheese, next to cheese products. All the other actual-cheeses were cheapened by this "cheese product" being sold alongside it.
Re: cheeses regulators would only stop the sale if it was harmful. They may say you can't call it cheese anymore, though. Not really the same thing. A real life example is Velveeta.