I must have an overactive imagination because I can think of plenty of problems that unregulated space industry could cause.

Industry requires infrastructure and support, when speaking space terms everything is way more expensive so cost cutting will be rampant on all systems. Centralized space communication hub? No, we're gonna be bombarded with signals since maintaining the equipment on ground is cheaper (astrology sciences would suffer). Way to many objects in an orbital plane? Not their problem till eventually it becomes a catastrophic event as our own planet can become (Kessler Syndrome). More mass requires more fuel? Dump all the junk at every opportunity clogging space lanes (micro meteors and radiation will no longer be the main safety concern for travel).

I could go on and on, think about the current state of shipping and logistics. We already have events where ships were forced to sit for weeks outside of docks waiting to be unloaded (source). The space faring ships will only increase in size. What do you do with the useless containers they ship the contents back to earth with? The cost would be too high for re-usability getting it back into space. What about the workers who are at an unregulated site and their conditions?

I agree it's a conundrum of how do we advance when advancement causes destruction. It's something I've wrestled with when considering the Fermi paradox. Either you live harmoniously with the planet and die when it's environment changes, or you use that sucker up and get out of dodge before the next mass extinction takes you and nearly all of the living creatures out. I'm hoping in the future we meet some neighbors that can show a middle ground works well to persuade out current trajectory.