KYC is also important for casinos and providers. Some key vendors tend to avoid providing games in countries that are restricted somehow. For instance, you can't play NetEnt's games in Australia. You can't access those games if you are trying to play them directly from Australia. You can do it if you use VPN or something, and this is for this case they use additional KYC.
Most of people currently more likely to pick the casinos not KYC required so they usually will avoid casinos with KYC verified and about it i think it's always be debatable for KYC purpose that most of players doesn't like this feature because want to stay anonymous while gambling and contradict to the players that some of casinos KYC required because they have the particular reasons why this mandatory and also using VPN not recommended while visiting the casinos because some of them doesn't allowed the players use this or it's more likely against their TOS if the players gambling using VPN