There's a very good response to that argument, and it applies here as well. It runs thus: sometimes society is wrong. Every advancement in our thinking starts out as a rebellion -- such as the civil rights movement in the 60's. Many of the participants did have something to hide from significant chunks of society, yet what they were doing was ultimately judged to be right.
Usually the things society judges to be wrong are wrong -- but sometimes they aren't. I want society to be able to oppose movements when they become large and vocal, and I want society to be able to ban dangerous ideas from public spaces -- but at the same time, I want individuals to be able to study and nurture any ideas they like in privacy, no matter how harmful or radical, because I want the good-but-countercultural ones to grow until they are ready to face society's judgement.
Privacy is often used to pursue vice . . . but that is an acceptable price to me, to guarantee individual freedom of inquiry.
So it is with cryptocurrencies. And for that matter, cash.
Sometimes our laws are wrong, and it is the black market which provides the demonstration and motivation to change them. Prohibition is an obvious example. Uber and Airbnb are controversial, but modern examples. Sex toys are an easily overlooked example. Marijauna legalization comes to mind, too; the laws are changing for that particular drug (and not for, say, Psilocybin) precisely because the scale of the black market has resulted in a lot of people having experience with it and giving us both personal experience and scientific data. If anonymous cash transactions were not possible, that probably wouldn't have happened.
The individual ability to buy anything, much like the individual ability to read anything, is both an important personal freedom and an engine for social progress specifically in the areas where society's mores are wrong. Sure, people almost always use this freedom to do things society doesn't approve of (either in the sense of the whole country or in the more restricted sense of their local community). Sure, those are usually things that are actually wrong. But squashing them isn't worth losing the powerful corrective force for society as a whole that arises from those few cases in which the miscreants are right.
I do want governments to be able to make laws, to be able to regulate commerce, to declare that certain things can't be bought and sold. But I don't want them to have such an efficient method of enforcement that small scale rebellion isn't possible. A certain persistent, low-level, ongoing engagement in vice is the price of moral experimentation, and I think it's worth it.