Because cars have so many unpriced externalities (smog-forming pollution, oil spills, noise-induced stress, tire microplastic dust, undercompensation for pedestrian deaths, etc), often the demand is not actually "economically useful" in the final analysis.
That's the elephant in the room. Since we apparently won't accept carbon/congestion pricing, then (as a fallback) any rational policymaker should want to suppress car demand. Paradoxically this improves economic efficiency, by helping counteract the perverse Externalization Subsidy.
EDIT: Policymakers can sometimes go too far, of course, or not far enough. Policy requires tuning. That's the downside of using central planning instead of Economist's Own(TM) straight sin tax, but again apparently we won't do that.