Indeed true that privacy coins keeps them from being identified since it is anonymous but when the time comes that they need to convert their coins into fiat currency then that time they are no longer anonymous because transactions like that needs proper identification to convert it into cash. But there are still some loopholes that they can use because the system itself is flawed.
Still they can't make a stronghold within the crypto space because they know there will be a time that the government will and eventually can crack them. So instead of privacy coins they still prefer fiat so some various reasons.
On the whole, there are ways how to withdraw money anonymously. Or you can spend it for online purchases. The other question is that not all privacy coins are really private. So it's better to choose coins that have their own decentralized exchanges, like
Crypton does. As many of so-called privacy coins still can be tracked or will be tracked once you'll decide to exchange it on a regular exchange.