You left out 2 of the biggest of at their time. Cryptsy and Mintpal which were both exit scams. Mintpal was famous among whales and cryptsy was basically main altcoin exchange at the time. These days owning your own keys was more reasonable as there were basically only few exchanges that were legit, and many of us weren't sure what those were. People hated regulations and wanted legitimacy at the same time. That's a combination that just doesn't work.

But anyway, we have come long way from there and new legit exchanges have born and i have way more trust in them to handle my cryptos then myself handling my own cold wallet keys. I lose house keys, usb sticks, important papers and such all the time so why in the name of god i would be safer storing my own privatekey. Places like kraken, bitfinex and coinbase have my full trust. Or at least i have more trust for them then i have myself.

I have however seen binance sketchy, but kucoin was is like imitation of binance, and way more sketchy. I could see kucoin going down any day and i wouldn't be surprised. Binance could go down too, but that i see way more problematic, as that would bring whole market with it. Markets crashing with FTX would be nothing next to it.