I'm from Upstate New York, where lacrosse is a big sport in no small part because of its popularity with the Haudenosaunee (Iroquois).
How/Why did lacrosse become so popular among the European immigrants, when so many other aspects of Native cultures were suppressed?
What allowed lacrosse to evolve into a major college and professional sport?
Why is it the only(?) Native sport to have broad popularity in America, alone among a host of games with European origins and traditions? (Football, golf, baseball, etc)
I can only really speak from the "Canadian" history perspective but since Haudenosaunee territory crosses the Canadian/ US border I think an answer that looks at lacrosse in Canada can perhaps be applied to the US as well. There's a new book coming out in the fall that addresses just the questions you're asking- it's called the Creator's Game, from UBC Press. One of the arguments that have been made is that settlers in the 19th century made a concerted effort to "indiginize" themselves, that is legitimise their claim on settled territory by positioning themselves as "native" to the land, and this created a national identity- so much so that in Canada lacrosse is now considered the national sport. This "indiginizing" is so ubiquitous that one of the lines in the Canadian national anthem is "Our home and native land." So this process of "indigenizing" the settler is complex and ongoing.
One of the ways settlers presented themselves as "native" to the land was by taking practices of Indigenous peoples and using the appropriation of Indigneous culture (with respect to lacrosse this started in the 1840s) to distinguish themselves from Britain. So things like lacrosse and snowshoeing (both of which had huge followings and clubs in the late 19th century) really took off to carve out a "Canadian" identity distinguished from a "British" identity. Another part of this was to deny the Haudenosaunee playing their own sport internationally as a sovereign nation, as they were supposed to be included within the framework of "Canada". There's a famous Haudenosaunee struggle against this from the 1980s-1990s with the Iroquois Nationals to reclaim their own sport, which is not just a "sport" in the western sense but tied to Haudenosaunee culture and traditions. There's also really disturbing stuff such as Indigneous kids in Residential Schools were "taught" lacrosse as the national "Canadian" game, rather than an Indigenous game. If you have access check out Downey's "Engendering Nationality: Haudenosaunee Tradition, Sport, and the Lines of Gender" in Journal of the Canadian Historical Association.
So to answer your question more directly settler culture did actively suppress Indigenous peoples from playing lacrosse in the way they used lacrosse as "medicine" and as a cultural practice, and made sure that any Indigneous teams had to make a show of adhering to settler stereotypes of Indigneous peoples (ie, they could only play with clothes that signified an "Indian" in the settler's mind). At the same time, lacrosse was used to express settler national identity as distinguished from British culture as it was a sport considered to have "originated" from the land that eventually became Canada. I would imagine the nationalisation of lacrosse as a part of settler identity and the popularity of the sport is how it became so popular in University culture,etc ( most of which was established in the mid-late 19th century in North America, at the same time national identity was being established in both the US and Canada).
Also, as an aside, hockey can be traced to Mi'kmaq practices, so lacrosse was not the only sport appropriated, and used to carve out a national identity for Canadians.
You may find this post from a few years ago to be of some interest: https://www.reddit.com/r/AskHistorians/comments/2eok5t/what_is_a_typical_game_of_any_pre_columbian/ck1p5zx/
If anyone around here knows the answer to this, it's probably /u/Reedstilt