My understanding was that it wasn't so much idiocy, so much as commercial interest. That is, lobbyists for dairy producers have been trying to get laws like that on the books. The cited reason was "confusion," but it's really just protecting the branding and health connotations of milk.
They aren't entirely wrong. Milk - cow, goat, what have you - has lots of things in it that aren't in substitutes. A lot more protein than almond milk, for example, though Soy is fairly comparable in that regard. Milk naturally has calcium in it. Substitutes often add calcium, but it's not there to start.
Milk evolved as a complete food. Baby mammals survive on nothing but milk. Various milk substitutes never are. They aren't intended to be, if you need to raise a baby and don't want to use milk, you use formula, not almond milk.