You discount the entire category of users who don't "hold" any cryptocurrency at all, but use it as a medium of transfer - buying as much as they need and then transmitting it elsewhere.
By sending an envelope with cash. Services often offer that option. No E-mail or name disclosure required.
A few advantages: Your payment isn't traceable for all eternity for the whole world to see. The amount I pay isn't suddenly worth 10% more or less the next day. Better for the environment.
Tesla's, until quite recently. It's also fantastic for tipping people online without all the grossness of Patreon or Medium. Easier than making a wire transfer (my bank sucks). I tend to use it everywhere I used PayPal, minus the places where it isn't supported.
Exchanging cash for cryptocurrency without a bank inbetween is a pain in the ass, but its a hell of a lot cheaper than, for example, Western Union.
I live in Mexico, I don't know if we're first world or not. We're kind of in between. We have bank accounts and debit cards here too. In the past when I wanted to send cash to the US or vice versa, I've used Western Union for the convenience - the local corner store (which in Mexico will be Oxxo or 711) has western union. When my family here in MX needs money, I just transfer it to their bank account via my bank's app.
I think many people in the US overestimate how privileged they are compared to most of the rest of the world, to be honest. I lived in the US when I was young but left because life felt easier here in MX.
Sorry for this kind of ambling response, I don't really disagree with anything you said, your perspective just piqued my interest :)