Well, if you look at the numbers, you see tons of usage in crime/gambling with bitcoin. Regarding the privacy - why do you think bitcoin is private? It's clearly not. Anyone can trace you. How is that more private?
A lot people use fiat for crime and gambling too.
Bitcoin might be not the best in terms of privacy, but at least it's the best coin for investment and privacy at the same time. The number of asset that the price appreciate and can protect your privacy is low, most of the time you can only pick one.