That isn't the point. They're supposed to be stable to be usable as currency. Using them as an investment class is a very off-label use that has emerged.
No, it's not. See wave after wave of stories about people thinking that crypto was anonymous only to be arrested for drug crimes and tax evasion.
I think the thing that's giving the regulators heartburn is the fear that this is looking like a massive bubble.
The limited throughput of the blockchain was always going to be a particularly bad problem.