LocalBitcoins offers a face to face option and your app only make things faster (a little bit) but not secure , people are scared of this kind of transactions as things could go wrong sometimes and you can see stories on the web about them... I personally wouldn't recommend continuing developing this application. Instead , you could start a unique project.
In my opinion , the safest way to trade BTC is when your privacy is not compromised (no ID,Passport required and no one sees your face (the case here) ) .
I totally agree with your line of reasoning, when you take privacy away from bitcoin, it loses part of its cryptocurrency qualities and only very few people would not mind. Other than that, the idea of asking or going over to people to give or take money simply brings us back at one. The world has gone real digital, no point living in the past.