That isn't what it's for. You can assume the government (really any government) has control over at least one CA.

What Let's Encrypt does against state-level actors is let people easily use HTTPS instead of HTTP without subjecting their users to self-signed certificate warnings.

A government could still MITM the connection but that requires an active attack rather than passive surveillance. And active attacks are subject to detection. So it protects against undetectable mass surveillance.

That would allow the government to issue new certificates, not to decrypt traffic to sites using letsencrypt certificates. Active man in the middle attacks are rather noisy, and things like HPKP exist to prevent such attacks

Cert pinning makes it a difficult and expensive attack to carry out.