I genuinely don't understand how anyone can think it's anything other than governments trying to destroy online anonymity. "Think of the children" is a cliche for a reason.
CSAM is not an overstated problem. If anything the amount of child abuse behavior online is an epidemic. The world's richest man sells a CSAM generator, the most popular game for kids under 12, Roblox, is besieged with predators.
Are governments good at regulating technology? Generally no. Is there a real problem that needs to be regulated: Oh my God, yes.