Of course governments can legislate to ban companies from implementing E2E, such that they cannot read intercepted messages. People who then have a need or wish to still send E2E encrypted messages will find ways to do so using existing methods as the OP eloquently points out.
But then the governments will legislate against citizens usage of the technology. This is the logical next step in the over-reach.
But then the governments will legislate against citizens usage of the technology. This is the logical next step in the over-reach.