Let me reformulate:
Why screw around with on chain [...] when an off chain [...] solution. (sic)
[...] Why? You are putting information about your identity on a PUBLIC LEDGER!!
[...]
More importantly, why are you doing it when there are other options?
Having stuff on a public ledger is obviously a requirement for anything that is based on a decentralized consensus.
That is a pathetic argument.
It isn't a pathetic argument. One of the advantages of a distributed ledger is that it is broadcast. Thus it is impossible to tell who is reading it. That adds a lot of anonymity right there, compared to solutions that involve some sort of routing. Because any sort of routing is a big red arrow pointing right at you. A lot of the snake oil coins rely on randomizing a bunch of stuff ("pick random nodes!") and claim that works because it sounds secure to non-experts, but without carefully thinking about the range of possible attacks such as sybil attacks or economic attacks on the nodes.
A distributed ledger system by its effectively broadcast nature removes even the possibility of any or all of these "nodes" being compromised.
Why would you risk it?