In any case, regulating Bitcoin by controling >50% of the hashing power is perfectly possible. At minimum there's always the nuclear option of telling the (very few!) chip fabs of the world to add kill switches to the ASICs they make and/or regulate who can buy them.
Its already happening with 4k Playready 3.0
hardware DRM and Intel, AMD, Nvidia, and Qualcomm and Microsoft are on board.
http://www.pcworld.com/article/2908089/all-about-playready-30-microsofts-secret-plan-to-lock-down-4k-movies-to-your-pc.htmlWe have a lot of work to do with the Open Source hardware movement and we may need to start considering creating open source ASICs designs for PoW. This or start rolling in a TaPoS layer(wallet or protocol) on top of PoW that we can use as a fail safe in case your concerns are realized.
KYC on the blockchain sounds like a horrific idea that goes against some of the core ethical and design principles within bitcoin. We should treat such attempts with utmost contempt and as an attack on Bitcoin itself.
If I wanted KYC I would prefer simply using FIAT and adopting all the risks and benefits with such shared ledger systems.