Judging from the answer to "What is insider trading exactly?" that defines it as any trading done on material non-public information relating to an instrument, it seems overly restrictive to me to ban it.
By minor extrapolation, such a ban (especially with the harsh penalties mentioned) may mean that all sort of profit that is made on information relating to good or service that is not public is inherently wrong.
Yet, if I were to spend time and money discovering new applications for, say, aluminium, and suddenly stumbled upon a billion-dollar opportunity, be I an individual or a multi-billion dollar corporation, and started buying aluminium en masse, am I technically not guilty of insider trading-like activity? I'm using information that is unknown to the general public (such as the new invention involving aluminium as material for production) to profit off a commodity (aluminum).
While I get the gist of how easily abused can insider trading be, as a proponent of libertarian economics, I don't see a lot of difference between utilising private information relevant to a stock to utilising private information relevant to a good.