That doesn't pass the smell test. We keep animals in effectively torture-houses then kill them to eat them. I doubt that anyone would actually give a fuck if they just killed a bunch of horseshoe crabs. I mean, like, vegans would, but vegans' concerns are already ignored by everybody else.
I mean.... we do try to use literally every part of those animals we kill, from their tenderloin to their skin and bones.
If we're killing 175k crabs per year, it'd still be better to use their bodies for bait (if the alternative is to throw them away, and kill another 175k + the rest for bait).
Neverminding the ethics, it would perhaps be ecologically better if we could farm horseshoe crabs, and fine-tune the bleeding regimen to manage the externalities as one does with lumber and forestry.
Exactly, this just appears to be a war of well monied groups. Group A makes a billion a year bleeding horseshoe crabs and group B wants in on that and has come up with a synthetic alternative. The group that wins will be the one that lobbies the best. This round appears to have gone to the horseshoe crab bleeders. The proponents of the synthetic alternative most likely have financial incentive to do so.