that day will only come when the government fight against decentralized systems ends and of cause, I don't think it will. Kyc before now was a thing of choice on most online platforms or casino to be precise. Users loved to protect their privacy and identity and thus stayed away from any means of verifications that would expose their identity. Though privacy and anonymity was an advantage of the non kyc, but then every good side has a bad side.
It’s not about the government fighting decentralized system but rather to avoid problem dealing with money launderer which is the common issue of online services. You can use mixer services as an example for this, Their service was used by criminals freely since they don’t have KYC that’s why the government seize their business as whole in contrary if they have KYC which they can just submit the ID of the criminal who use their services(ofc this will not gonna happened since mixer promotes privacy).
KYC was already available to all type of services even before cryptocurrency was introduced. We can’t say that government is using KYC to fight decentralized system but rather to fight criminals hiding from decentralized system.