If all bitcoin users, collectively, completely ceased to use and support any such exchange or other service which implemented such blacklists, then the whole provably nonsense concept of taint would simply cease to exist. The only reason that some coins can be deemed as tainted is because we continue to use services which fund the very entities who made up this bullshit.
Any time you come across an exchange or other service which makes you pass some kind of fucking verification, as you say, then A) stop using them and find an alternative, and B) encourage others to do the same as well. This is the only way bitcoin will actually give us the freedom we are looking for.
Every year, services that freely accept bitcoins are becoming less and less. The fact is that many stores and other sites are starting to accept payments with bitcoins not directly, but through payment processors, and all payment processors also have an AML mechanism.
In the end, it all turns into a complete headache, because if, as you say, we leave those services that implement such checks and look for alternative ones, then we start to face other problems. For example, alternative services do not have the products that we need, or they are available, but not as good as they were in the service that we had to abandon.
It turns out that you can spend a lot of time dodging all sorts of additional checks in the crypto industry in order to finally find the service that will not encroach on their privacy and the purity of bitcoin.
Most people, seeing such prospects, will simply spit on all these alternatives and calmly pay using the usual payment methods, using a bank card.