Setting aside issues that can be safety related where consumer equipment overlaps with legacy equipment, there is a tragedy of the commons effect to not attempting to regulate radio power limits.

It's incredible how well WiFi works for the amount of power it uses.

Obviously turning up the transmit power makes it better... for that one person. For everyone else, that channel has a little bit more noise than before, making it harder to receive their signal.

So maybe their neighbors will also want to increase their transmit power to get better range / speed again. Having a limit across the board for all mass manufactured devices prevents an escalating spiral of vendors selling 30, then 40, then 50dbm etc routers.

As mentioned elsewhere, different countries have different power limits, but it's more economical to make a single radio for all markets with software power limits. One hypothetical way for a vendor to get a market advantage is to sell a radio that is software limited, but wink wink can be patched with easily googled instructions to increase the power to work better. Maybe by downloading a tool from some sketchy website that even actually works and can be spammed across the internet or social media.

So the FCC has to strongly discourage anything that could lead to lots of radios deliberately exceeding the regulatory limits and disproportionately making the spectrum worse compared to a compliant device.

I don't think that necessarily justifies rather invasive schemes like geolocated AFC, but preserving the use of the radio spectrum so that everyone can make efficient use of it is the FCC's mandate.