Kyc is actually not bad for crypto as it helps in curbing fraudulent activities on the space. However it is always necessary for those asking for kyc documents to protect these docs in the best interest of their users to avoid these documents leaking to a third party.
However, exchanges are not doing it in the best interest of the user. They are doing it only to be compliant. Also, your private and personal information are not safe. They are usually sold to 3rd parties for profit as
normal practice. They also might give them to a demanding government.
we all know that giving out identities to people we don't know is very risky, it's just that for popular exchanges it might be an exception. they did it because of regulations, and if there were no regulations, they might not ask for KYC. but, some people refuse to give their identity until now. Well, that's a choice.
Why do you think that "popular exchanges" (I guess you are referring to the exchanges like Binance) won't sell your personal information to 3rd parties? If you give them you personal information, you trust them. Isn't the main advantage of crypto the fact that a person doesn't have to trust anyone?