My take on it is that he understood that absolute privacy of transactions - be it BTC, fiat, or whatever - naturally opens the doors to a myriad of illicit uses. Only an immutable and public ledger gives a way to track those uses and yes, if need be, prosecute the folks involved. By being a public ledger he (thought he) removed the ability to use BTC for things that are against 'The Public Good'.

Now, the sticking point is that yes, transactions can be followed through the blockchain BUT who/what has ownership of coins cannot be discovered until they are exchanged into fiat or some type of physical goods which can be linked to people & organizations. He wanted to make sure that BTC had that discovery mechanism.

Of course ones definition of 'illicit activities' and  'The Public Good' largely depends on the individual and their governments...