how much resources would a state employ, to go after a random citizen who might have spend 50 bucks of BTC on a dinner, without declaring capital gains on it?
They won't go after one particular random citizen, they'll just analyze everything they can and see what comes out.
Then there's the consideration that KYC is a huge security issue for end users (hacking of exchanges, data leaks, etc). A person doesn't need nefarious reasons for wanting to improve their anonymity.
Obfuscating your current holdings won't change the potential risk from a data leak.
Well once you have registered to a KYC exchange then they've got your data, which is a complete dox (full name, address phone etc) plus your transaction history and current crypto holdings. This is always a problem whether you have mixed your coins or not, since you become a target of "potential BTC holder". But if you have not been paying attention to your utxos, then you'll have a bigger problem. But when it comes to exchanges, you cannot use mixers anyway since they get detected by chainalysis potentially, which could get your funds frozen. Nonetheless, the idea of obfuscating your transaction history before sending it to someone that will store the data in order to separate your main stack from the funds you are moving is a valid reason for doing so. In general, before paying to someone, you don't want to disclose your transaction history, this is why mixers should be fully legal, it's just a matter of safety. You don't want to be the guy that wants to buy something, sends the BTC, and then the receiver can easily go through tx history on the blockchain and find out you've got like 10 BTC and suddenly you become a target. To avoid this, you must obfuscate the funds you want to use first, and then send it to the receiver, but exchanges that use chainalysis are incentivizing people to not do so, putting them in trouble when they get hacked.