but certainly not a dumb law like "we can magically make public info private in the age of the internet"
That would be a dumb law, but that's not what this is. You really need to understand it before you start criticising it.
Libraries keep archives of newspapers, often on microfiche. Any articles about you are recorded there indefinitely, but they are not easy to find. Someone has to go there, have some idea of what they are looking for and where and when it find it, and then spend considerable time manually searching.
Then credit reference agencies came along and started collecting data about people and selling it on for profit. Suddenly it became much easier to find out if someone went bankrupt 20 years ago. People realize this was a bad thing, because a mistake 20 years ago could prevent that person from say getting a mortgage or starting a new business, despite not having had any problems since then. So laws were introduced to limit what credit reference agencies could report.
The story about that bankruptcy is still there, sitting in a library archive somewhere, maybe even on the paper's web site. But it isn't easy to find, and most people won't bother going to the lengths needed to discover it.
So, it's actually a very sensible, practical law that works in the real world.