My question is, what prevents itemisation in bank statements directly?

I have always wanted for my itemised purchases to show up directly in my bank account (instead of just the total). From there, I could see how much I am spending by either automatically generated or manually defined categories. One step further would allow me to budget my money not into separate accounts but by category (think sub-folders within your accounts). You can define the limits of a category and transactions are declined when you've hit your budget and attempt a purchase of that category / product type.

Is there any argument to be made for the bank not having access to the individual purchases (e.g. privacy concerns, too much data)?

Are account holders with a grasp and control of their money and spending not more beneficial to a bank / businesses (not an expert, so forgive me if this is a bit naive)?

I think some third party apps attempt to solve this, but as far as I'm aware they are more of a view of your accounts and not able to control transactions / spending limits. Personally I'd also rather not give my buying information to another entity.