The tricky part is that there is no reason to suspect that the legal operation will displace the illegal one unless it can deliver enough product; and the whole problem is that there appears to be no way to do that without unsustainable levels of hunting. When the reason why there isn’t legal competition for the criminals is along the lines of ‘because, um, reasons; and you can’t compare the risks of something that is legal with something that is illegal’; a simple legislative fix allows for the production of enough to suit demand(generally with lower costs, better quality control; and fewer people getting shot).
In this case, the problem is that the supply we can get without driving the species to extinction is estimated to be vastly less than demand, enough so that poaching is apparently amply worth the risk. If we added a legal market, set at whatever level was deemed sustainable, we’d still have the remaining customers once the legal stuff was out of stock for the year, who we know are willing to pay poacher prices.
Plus, flat bans are convenient for regulatory purposes because obfuscating the provenance of something is typically easier than hiding it entirely(or, worst case, it’s a nice alternative to have if conventional smuggling isn’t the easiest way). It’s not as though destroying horns and ivory brings dead animals back; but “You have a rhino horn; therefore you have an illegal rhino horn” is markedly less vulnerable to…legal flexibility… than “I have a rhino horn; but it’s seized material; and all profits are defintely going to conservation, so it’s ok.”(plus the exciting opportunities for collusion and regulatory capture of the rangers and conservation authorities by poachers: poachers kill rhino, attempt to exfiltrate horn? Illegal. Poachers kill rhino, rangers bravely move in, drive off but unfortunately fail to apprehend poachers? One squeaky-clean horn is ready for market!)
If, say, some biotech outfit proposed a method of doing cute tissue synthesis tricks and conjuring up lab grown horn; I’d be much more sympathetic to the notion of flooding the black market out, since (as with situations like Prohibition) the legitimate market would have the capacity to serve the demand, if only allowed to; but if your legitimate supply is going to be necessarily constrained, it won’t be terribly likely to displace illicit supply; and it will add substantial enforcement complications.