The ATF was created during prohibition, and as they got bigger they started making policies on what they can enforce without consulting with the government. (Bump stocks, and the brace for AR pistols). They have also severely embrassed this country with their failed Fast and Furious operations which just sent more weapons to the Cartels.
I suggest disbanding them, the FDA can handle both Tobacco and alcohol. While the FBI and local police can handle the firearms. FFL licenses can and should be a thing, the FBI can have a process for assessing and granting. As well as investigation/inspection of holders of FFL