KYC is simply an acronym for; "Know Your Customer"
I don't see anything wrong with it provided the process is decentralized and the data not accessible to questionable characters and data harvesting groups out to violate people's privacy.

The excuse that cryptocurrencies should be anonymous has made questionable characters to utilize it in laundering public fund, deal on illicit drugs among others.

These acts should be discouraged by bringing in KYC to the ICO business.