One of the first jobs I had was tech support for online casino. In my free time I've read a lot about about that field, and all I can say is that your analysis is spot on.
Even strategies like optimal strategy & card counting that equalize the chances a bit are frowned upon by the house.
Of course because the house edge is not just the profit of the house but it's insurance. The lower the house edge, the higher the tail risk.
Casinos have to be well capitalized to defend against high variance risk, by deploying bet size caps and adjusting the house edge accordingly.
If a billionaire would come to a roulette table playing martingale, chances are, that he would walk out of there with profit. That is why roulette has maximum 10,000$ bet limit, and even that is for VIP only.
So by banning card counting they are just reducing their risk, as a 0% house is very dangerous for them, because it is unpredictable, and the house might even go bankrupt if big whales exploit that, so they can only function with negative edge and betsize limits.