What caused a bunch of stuff to go out of control was that several terrorist groups tried to hack into the Netsphere multiple times in the past, and this resulted in the Authority/Safeguard no longer providing new Net Terminal Gene codes for people to use in order to access the Net Sphere, and instead kill anyone who now attempts to enter the Net without the required Gene.
Unfortunately, these genetic markers, the Net Terminal Gene, were only provided to the mega wealthy and those of high influence in society (the usual stuff of cyberpunk fiction lol). This Netsphere however is only accessible to those who have the genetic markers required to access it. Way way before the events of Blame! humanity created the Netsphere, a utopian virtual reality where they can upload their minds into an almost post-scarcity civilization. A lot of what's happened to the world at this point makes a bit more sense if you read the prequel manga of Blame! called NOise but overall here's the major points:
