Unfortunately for the chickens, a government is supposed to serve the interests and well-being of its citizens, not that of its livestock (insert joke about there being no difference).
Maybe the majority of the citizens wants to live in a society that is kinder to animals? (That said citizens might not fully appreciate the knock on effects that will have on costs is a separate question. Do people actually want to be kinder to animals if it means eggs cost twice as much?)
Well those people can already buy free-range chickens. This is preventing people who'd rather pay less for cruelly-treated chickens from making that choice.
Given that it's a democratically elected government that made the regulation I don't think there is anything the "people who'd rather pay less for cruelly-treated chickens" can do here other than try to lobby for the rule to be reverted or moving somewhere where animals can be treated "cruelly" without repercussions. It's not always only a question of free market.
