Different jurisdictions have different compliance requirements. Not sure, but my guess is the goal of this project is to allow regulatory arbitrage with a single unified interface.
Or more trivially, TPL for account tagging.
Microsoft's initiative on decentralized identity leveraging on the Bitcoin blockchains could be a component in this. Excellent podcast episode here: https://letstalkbitcoin.com/blog/post/what-bitcoin-did-107-m...
Not to say you're completely wrong, just that smart contracts can be used to enforce regulation rather than skirt it - like any tool the outcome depends on the intentions of the one wielding it. :)
Zero-knowledge proofs or RingCTs? Great, require disclosure and reporting of proofs or view keys to the man, who will enforce it for all interacting parties.
"You can't enforce bans on running nodes"? Well, start enforcing strict control of the public IP space so everyone address has a responsible individual behind it and put severe penalties on unlicensed crypto/privacy enabled assets/what have you.
I am thinking more and more we need to seriously consider moving the web to something like I2P or Freenet before it's too late.