It is an immutable law of commerce that any effort (be it legal, technical or otherwise) to protect people from obnoxious and/or harmful behavior by businesses will be fought tooth and nail by obnoxious and/or harmful businesses.

That has nothing to do with it.

Businesses block fake email generators because they’re overwhelmingly used by fraudsters/spammers/etc trying to abuse systems.

Anybody who’s ever run an internet service that allows open registration or has a free plan knows this the hard way.

Exactly. They want to only have direct personal emails so that if someone is a spammer they can easily be blocked/banned. And so that there are consequences for spamming. This is sort of the same principle as KYC.