It's definitely not that simple. The primary issue here is that many crypto gambling sites take advantage of KYC in an unfair manner in order to avoid paying out winnings and screwing gamblers in the process.
For example, a top site like Stake has been harassing a particular gambler using KYC as a shield. This is just one of the reasons as to why KYC is usually frowned upon.
KYC is a double-edged sword if you think about it.
It is that simple. You said it yourself.
"has been harassing a particular gambler using KYC as a shield" That's a reputational issue of bad business practice. Any site that doesn't state it the Terms could also use it as a shield.
I was pointing out the legal obligations anyone providing a service is under. Omitting putting that in the Terms doesn't remove it.
It's sad that bad businesses unfairly not paying out makes you guys think that anyone honestly stating their obligations in their Terms will do the same.