One big reason is you're removing the economic incentive to produce good evidence. The herbal remedies industry is a perfect example, there will be valid treatments there but yet the industry is almost entirely medically useless. Some of the treatments might be effective for particular diseases, at particular doses but no one ever knows. These companies have billions in revenue and are vastly profitable but they never look for evidence that treatments work because people buy the remedies anyway, and a company that spent the money to run the trials would be undercut by less scrupulous competition. This is not even a market with asymmetry of knowledge, it's a market where no one knows anything, and the lack of regulation makes sure it continues that way.