Celestia is not fond of changelings, to put it mildly.  The first changelings came about before her time, and the race as a whole has been hunted ever since because they are seen as horrid abominations.  Her prejudices against changelings were not helped at all by Chrysalis’s invasion.

A changeling hive is effectively a sovereign body, not under Celestia’s jurisdiction, and therefore she cannot banish it from her kingdom.  Celestia would not banish Papi’s hive, she would destroy it.