That breaking up a monopoly (and how do you define one, anyway?) is good is not obvious (economies of scale, etc). But even taking this as given, that sometimes monopolies are bad, it is far from clear whether allowing government to intervene will be better.
You have to weigh the costs and benefits. Anti-trust law is extremely subjective. It's existence incentivizes companies to use it against each other to gain a competitive edge rather than real value-added approaches. Anti-trust law creates uncertainty that can deter innovation (should we develop this technology if we can't fully profit off of it?)
Government institutions are like all other institutions - they want to survive. And to survive, they need to grow. Mission creep is inevitable. So even if you have identified a narrow area in which government intervention can help, it is not obvious that we should allow government to intervene.
Regulation is a tool to change the landscape and the conditions in which businesses and individuals operate.
You can regulate in a way that benefits certain types of business, i.e. breaking up a monopoly helps smaller businesses. Making the phone companies lease their lines to smaller competitors is a GOOD thing for competition and diversity.
The notion that regulation only ever stifles the economy, in that sense, is simply incorrect.
That is not to say that there aren't regulations that have a stifling/dampening effect, nor that there shouldn't be. Sometimes you do want to raise the bar across the board. We need banks to be sufficiently capitalized in order to be able to pay their customers back.
That may be stifling for banks, but it's in OUR best interest.