Just Bitcoin is currently doing roughly 250,000 transactions per day, and they will have to somewhat manually go through all of them to check for 'illicit activities' and that all of them are somehow linked to a real-world identity of someone. Right?
Reminds me of the guy who claimed to have a trading bot set up to trade constantly all day long with a target of zero profit, just so he could send thousands upon thousands of meaningless trades to the IRS and force someone to waste their time going through it all.
Also I don't get how they want to handle Monero, since the transactions aren't public. Will they just ban it? Many open questions.
I imagine they are approaching this the same way the approach most of their mass surveillance programs. Mass surveillance isn't used to prevent crimes, terrorism, etc. Mass surveillance is used to control the general population. Far more people use Bitcoin than use Monero, so it becomes the prime target for mass surveillance.
I understood the proposal a bit different: for every transaction to an exchange/payment processor/other service provider you have to provide the identity of the sender, but only if the transaction is over 1000 € it must be reported automatically; however, the information must be transmitted by the service provider to the authorities "upon request", and there are other cases where a report can or should be sent by the service provider (if it's suspicious to be linked to criminal activity).
Looks like you are partly right. On closer examination though, it isn't that individual transactions can't be over 1000 EUR, but rather if that person has received over 1000 EUR across all transactions. This gives you a deposit limit of slightly over 0.02 BTC at current prices before you are automatically reported to the authorities.