Prohibiting non-competes means you can't make a contract with a non-compete provision. Allowing non-competes is less of a restriction on people's freedom to contract.

(Personally I think prohibiting non-competes makes employment work better in practice)

Yeah but people don't care about limiting their employer's ability to make contracts. Only their own.

But by being able to give your employer more (the non-compete), you might be able to negotiate more in return. Removing the ability for you to sign a non-compete might limit your benefit.