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?
Address-as-identity does not use the blockchain at all.
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?
Reusing addresses doesn't merely hurt your own privacy. It hurts
everyone's.
There are also security ramifications. And now adoption issues too.