Of course it does. In fact, if you want an even better line: if it's a greed motivated system and we work against greed, we're directly disincentivizing economic activity.

It's absolutely a fine line to draw. History has examples of the economic noose of overregulation just as surely as it does the industrial dystopia of underregulation.

It's a lot like medicinal drugs (medicine). The difference between a poison and a cure is dosage. Too much or too little and you can hurt someone instead of helping them. Or the interaction of multiple different treatments create new and possibly terrible outcomes.

Regulation (greed control) to me is very similar. The difference between good regulation and bad regulation is very minor, it's dosage. A good policy applied the wrong way is just as bad as a bad policy. Multiple policies of regulation may interact in new and crazy ways.

So to me the proper regulation of Capitalism is like trying to dose a new drug. It's extremely difficult and nuanced to do well. And even if done well, as you pointed out, there is always the incentive to cheat, and always the fallout of the disincentivization our actions cause.