One very common scenario is to use a bitcoin address as the identification. This may be used in faucets, mining pool, gambling sites, and maybe future block-chain based exchanges. If address reusing is discouraged, any alternative is suggested? To introduce another identity-> bitcoin address translation layer?

Maybe you mean outgoing only? An bitcoin can accept many incoming transactions, but it can send out coins only once? That's a little bit better, but still in many scenarios people are expecting coins are sent from the same address. Mastercoin is an example.

If people want to hide their trace, they can choose not to reuse addresses. If people don't care, why have to increase the difficulty for them? Why not just let the users to make the decision?