U-238 can be bred to plutonium.
Can be, but then you have nuclear proliferation problem.
Nobody uses power reactors for bomb programs. Thus that leaves the only threat being diversion. There's a reasonably simple fix for this: Don't do full reprocessing, just remove the useful isotopes and the poisons, leave the rest. The plutonium will be mixed with hot debris, very easy to monitor for and likely to make a diversion attempt accomplish nothing more than suicide.
Furthermore, plutonium from a power reactor will have heavy contamination with Pu-240. While it is technically possible to make a bomb out of such material (there has been a successful test of a bomb based on power reactor plutonium) it's far harder than a normal bomb.