It is in fact a demoralising mixture of stupidity and apathy.

Someone important who's never ridden a bike hears an anecdote one day of a bike catching fire or whatever and decides that teapots are the solution. The law passes because because no one involved has ever ridden a bike, probably never even had to fill up their own fuel.

Everyone below follows blindly because they don't care and it's not their problem. You can't yell at the petrol station attendant that it's stupid, because he doesn't care and he's just covering his arse. You can't yell at the station manager that it's nonsensical because he doesn't care and he's just covering his arse. You can't yell at whoever's above him because etc...

Those who could change the stupid law won't benefit financially from doing it, and since no one cares apart from a few insignificant riders, it will never change.