I never understood why people gets upset when an exchange asks your ID. This is because in my country , within UE, i can be arrested (for a couple of hours) only because i don't carry my ID documents (nationality and driver license) when i'm on public places (streets, sidewalks, etc). If an officer stops me and asks for my ID i have to show him my documents. It's simple as that...
Huge difference between one person's documents in your pocket and a million documents on a web site. The latter is a huge target for hackers.
"the [MtGox] hacker also have access to a 20GB data dump of customer data along with passport scans"
https://bitcointalk.org/index.php?topic=498522.msg5485610#msg5485610Uploading your personal data to any web site is inherently dangerous and should only be done with great caution and only when absolutely necessary. I never uploaded my documents to MtGox (thankfully) and stopped using the site when they started requiring them, for exactly this reason. I had no legal concerns whatsoever about the source of funds in my MtGox accounts at all (they were all solo mined coins) but I did not trust them with my personal information.