Our state did it for revenue. Weird thing was in southwest Michigan, all the firework places were across the state line in Indiana. People'd drive down there for their mortars and big boomers. (the ground-based ones were legal here) But over on the southeast side of the state, all the firework stores were on the Michigan side because (I think) ALL fireworks were banned in Ohio. I guess the cost of a few lives and some hospital visits, and a few noise complaint calls to the non emergency police numbers doesn't eat as much as the revenue makes. It's just a really obnoxious way for the states to make money--mostly because people don't stick to the hours and enforcement is next to impossible. If the state wanted money, station some cops around neighborhoods at 11:50 and start handing out the $500 dollar tickets at 12:01.
You'd think they'd be able to make just as much in taxes as they would from expensive fines and tickets. I think the more important thing is for fireworks themselves to be closely regulated. While you can't prevent people from being idiots, maybe some people could be saved from harm if inexpensive and potentially more defective fireworks were removed from the equation. Also, props to you on the relevant username.