I think calling this too much government inaccurate. IMO it is government not doing enough what it should do, and putting its hands into private issues too much. So cutting government regulation won't work.
This is a case of a home raid and tossing the house that resulted in the killing of a pet. If you don't think that is too much government power and abuse, I don't understand your world view.
In my ideal world, a govt. rep would reach out or knock, even with a warrant, to do an animal wellness check and remove the animal in case of abuse and to cite the owner and specify the correct forms needed to keep the squirrel.