Derivatives are fine. The problem is the government implicitly insuring the biggest gamblers from any major losses.
Discussion
In bitcoin, a peer-to-peer electronic cash system, a derivative = not your keys, not your #bitcoin.
Sure. But derivatives serve different function (besides the degen trading). Hedging and insuring the risks is conceptually a fair efficiency gain.
Figuring out the most trustless way to do it is a separate issue.