I guess I can't argue against someone who takes the stance "Wasting your Bitcoin and ruining your privacy should be allowed."
Wasting your money and your privacy in real life are allowed, I do not understand why here should be otherwise. If you are reckless, you are going to regret it. I do not propose to not warn someone for their bad actions, but if despite the warning they still will want to do it, who am I to stop them?
And they are correct. Your absolute claim that you "negate the potential gained privacy" is false, because it is absolute. It is the same as saying that mixers provide no privacy.