I agree that the purpose of creating bitcoin was for it to be a peer-to-peer currency that does not depend on any 3rd party but as of now, I don't think we can make that happen. Although we have turned bitcoin into a speculative asset for profit, even if we had not turned it into an asset, it would hardly have become a currency.
There are third parties to confirm Bitcoin transactions, find Bitcoin blocks but they are decentralized around the world and it's better with decentralization compares to banks that are centralized.
Bitcoin serves many use cases and we don't actually need Bitcoin to become legal tender as a currency, to use it as Store of Value or as a mean for exchange. If government in your country don't make fund transfers through Bitcoin blockchain is illegal, you can do it without fear that government don't accept it as a currency.
There are no KYC exchanges to use too if you are concerning about privacy.