It's simple.

If you move around Huge Money you want every partner (exchange) to hold your ID details so you won't have problems proving that transactions did occur on your part.

Most websites that use KYC feature have a third-party KYC processor who holds the data secure. Still, use your own research on each KYC demanding project as these policies differ a lot.

When someone is doing KYC, they are forced to hand out parts of their personal identity to a third party (such as an exchange, ICO, etc). After that point, they aren’t in control of the process anymore and are totally exposed on the third party to handle their sensitive data safely. If something should be hacked, the affected people can't do anything.

Why is a company using a third party service safer? I'd argue the exact opposite. Companies often tender this out to the lowest bidder, who invariably have very poor security. It also means your KYC documents are being shared around with more people and with third party companies, so there are more opportunities for a malicious employee to access them or a hacker to steal them. Your Binance example is a poor one considering they were hacked for thousands of users' documents and information just a few months ago.

I’ve never submitted to any “KYC” identity-rape doxing for anything whatsoever even remotely related to Bitcoin.  On principle, I never will.

—then I would be much happier than I will be to see my modest stash “moon” as I lose my tiny little sliver of financial freedom.

Also there is literally a board named "Serious Discussion". That's where serious discussion can go without being subject to the uncertainty of a special excempt self-mod thread.