Every developer has their own way of being productive which involves different tools & software. Forcing everyone to use one standardized environment sounds horrible.
Any developer that is willing to face the legal consequences of installing software that causes business damages, can go ahead and work around the system.
Sounds like there could be a middle path. Instead one fixed dev image, there can be base image + inventory of other software, where free ones anyone can install. Paid ones need approval and/or decision who will pay for it. But IT department is surely not one I imagine that can create decent inventory. So there needs be a catalog for such things which companies can purchase or subscribe.