KYC is becoming more and more required in crypto now, and there is a possibility that within the next 2 years crypto wont be available as it is now without KYC and even harder regulations, i do so much hope that it don't come to that, it will kill the basic idea of crypto.
It is definitely a problem right now and as you say it is probably going to become an even bigger problem in the future but that is not going to kill the idea behind cryptocurrencies, what we need is more people to accept cryptocurrencies directly as a payment and that only is going to happen with more adoption, but once that happens those regulations are going to become meaningless because you will be able to use your coins directly to buy anything that you want without having to go through KYC.
If KYC is required for the purpose of buying bitcoin, for regulating the activities of members who over the years might have given the crypto currency a bad name as a result of their activities. However divulging personal information is the greatest risk of which if such information is not kept save can also be used against the owner of the information