When the 401k was originally made in 1978, the tax-deferred route was the only one possible, so money would remain invested and untaxed until it is withdrawn. There was a concern that this would provide a misincentive for people to hide their high salary income from the progressive income tax regulation. At its core, this incentive delays the taxing and ongoing exchange of that money until it's removed from the market. While this provides economic investment to the economy, it does not provide economic growth or the taxable exchange of goods.
The government does not want its citizens to save as much as possible. It wants them to save just enough to not be displaced by economic hardship, and to spend everything else.
In theory, the government needs money to operate, and a portion of that money should come from the exchange of monetary goods/services (to maintain faith in the currency). While one concern of the government might be that citizens do not prepare their finances for an uncertain economic future, the government as a whole is likely more concerned with having too many economic misincentives that would hinder the funding and expansion of government services.