I find myself spending a lot of time trying to pull people away from a vision of BTC that they want to be true, versus the reality of it.
Without even realizing that your vision of Bitcoin is not the same as the reality of Bitcoin either. Impressive!
OK I'll bite. What am I missing? What have I said that is inaccurate? Instead of taking a pot shot at me, why don't you educate us?
This is what you are missing:
With btc Bob does not have plausible deniability, because every single BTC transaction is documented.
The block chain records transactions between addresses, not identities. How will they prove that the address belongs to Bob? In fact, why will they even
think that the address belongs to Bob?
I was trying to keep the example simple. You haven't taught me anything new, except to ask me more questions. Here are methods someone could attain btc with their identity involved:
mtgox account --> personal account --> drug dealer == busted
btc faucet --> personal account --> drug dealer == busted
do the above two examples with cash and you end up == NOT BUSTED (plausible deniability) (there are many more examples and I'm sure you can figure them out)
There are many methods one can use to protect their identity while transacting in btc, but to the average user who just wants to buy some drugs, they are much safer using cash.