I doubt that even with regulation the governments will be able to recover stolen coins. They can shake their fists angrily at whoever hacked the exchange but that would probably be it. Nonetheless it would make it easier to prosecute "hacked" exchanges. With regulation exchanges have to operate more transparently, making it easier to get to the heart of the matter.
Insuring Bitcoin exchange deposits is an interesting problem. Given BTC's tendency to heavily appreciate insuring BTC deposits won't come cheaply and would probably lead to higher trading fees.
I would never say that the government would have no way of recovering hacked coins. Maybe in some situations they will, with the cooperation of other exchanges, Bitcoin mixers and some concerned Bitcoiners. With regulations, it is the responsibility of the government to put hackers or thieves behind bars.
We do not have that kind of protection today.
There are definitely situations in which stolen coins can be recovered, but that's not the normal case. As soon as coins are out of exchanges they are gone, no court order or regulation will change that. You can try to track the transactions and hope that your target missteps, but that's it. Or do you expect the victims of ransomware to see their money again anytime soon? These coins are not gone for lack of a legal basis to prosecute the offenders.
In some cases I'd also argue that even regulations only offer as much protection as conflict of interests allows (*cough* bailouts *cough* golden parachutes *cough*)
