Points balance the market. Points are not set by government regulation but by lender individually. Not without jeopardizing the sale. Points charged on an FHA or conventional loan are usually not changed from commitment time to settlement. Homes can sell faster because more buyers can qualify with the lower down payment requirement, lower interest rate, long term loans with lowest monthly payments.
Sellers receive all cash for their equity to reinvest in a new home or other investment.
The purpose of these loans is to provide purchasers the opportunity to buy homes with minimal cash investment thus providing a bigger market for seller. If you are in doubt about points being deductible you should contact your tax return preparer.