Copyright infringement was also always illegal (and still is). That doesn't mean that Napster, BitTorrent, etc. didn't massively increase access to music outside the control of the copyright system.
Perfect analogy. From 1998-2006 it was easier to get pirated music than pay for it. Once the music industry realized that the days of people paying $20 per CD that they may only listen to a few times were over, the streamers took over and now 90+% of music is listened to with permission of the centralized gate keepers.
Regulators and other parties will catch up eventually. When there is a 500% tax on homes/cars you purchase with BTC the whole "decentralization/permissionless" idea will fade away.
