It's not a bad thing at all--there are plenty of people who just want to buy bitcoin as an investment and keep track of everything in order to pay taxes and so forth.  In those cases, they're not likely to care about KYC procedures.  You can't buy stocks without going through a broker, and all of them require KYC, as do banks if you want so much as a checking account.  It's not a big deal IMO.

Binance is also not the only way to purchase crypto for US citizens, and those who want more privacy just won't use them.  I'd much rather have Binance available in the US with KYC than not have it available at all.  You could ask the same question about Coinbase, by the way.  They've always required KYC documents as far as I know, and nobody has really complained about that.  You have to link your bank account to pretty much any exchange in order to deal with fiat, so it's not like they're not going to know who you are.