I can see more exchanges adopting it, not because of KYC but because of the increasing adoption of Microsoft B2C. What would you rather, option A - a new exchange trying to implement it's own secure authentication mechanism in which a single flaw compromises all your tokens and thousands of other users or B) utilizing one already created by a world leading company?
You could argue anyone capable of coding an exchange should already know what their doing but it's one less thing for them to have to worry about when developing.