This is really a very, very correct decision, which you must unambiguously understand today. Today, it is necessary to change not only the approach to the KYC process, but also the use of KYC as a whole. Because all this is nothing more than deception.
I don't think that all KYC is a fraud, this is like opening a bank, parties will definitely ask for your ID for valid identification and can be held responsible when something goes wrong, and KYC can now be used for validation when trading on exchange place or participate in ICO, and can be used to identify participants.
I would just simply treat all KYC as fraud besides the ones from the known exchanges like binance and the rest but its definitely fraud for a team who's doing ICO to collect data from us knowing that they can send these information to a 3rd party. Say you have invested just about $1K but to them it means you can invest into something which you are not sure yet and it means you have to money. Just this info itself is important not just for a marketing department but for hackers.