This argument does not hold much water when you critically analyze it. Anyone who really wants to circumvent the KYC process using dubious means can so do. It is the careless individuals who only wanted to claim a few airdrops or bounty coins end up putting up sensitive documents on the web making them vulnerable to the dark web.
The rationale behind it should be the desire of the government to have control over all the financial affairs of its citizenry, hence why KYC is required by all exchanges and other financial websites. Having an entire community transfer funds anonymously with no means of reaching it led to the idea of identity verification.