Right and since people did exactly that(i.e. started screwing others over), that's why there's a reduction in freedom. We deserve that. If you keep trashing your toys, you're gonna lose them, Billy. This concept is nothing new. Nobody would even have the idea of creating murder laws if people weren't murdering each other. Your insanely idealistic thoughts hold most true if people are decent, but they instantly fall apart when introduced to the reality that we're nowhere near as awesome as you seem to think we are.
Government is made up of people and people have always had issues ensuring peace. Look at Easter Island, had everything they needed, but people can't get their dicks hard without conflict. If you really want to scapegoat accountability of the people and blame some entity, you'd be waaaaaaaaaay more accurate if you swapped "government" for "religion", but even then, religion is nothing without the people to screw it up.
The government is anti-screw-people-over and since people are shit, they have to regulate them. It's not like all the laws we have are for nonexistent problems. All those laws exist because some people out there were doing shitty things to others, so the gov't created laws to punish them for it.