If you're not a trader and just want to hide your wealth from the government, why would you need to keep your coins on "hole-ridden exchanges"?

That's how it's ended up, which is a shame. The idea behind cryptocurrency had the potential to be used for good, but the execution has been so poorly pulled off that it ended up being scams, speculation, and air pollution.

only very rarely do intelligent people get their wallets drained -- its mostly young people hopping on the cultural movement (e.g. NFTs, games) without actually knowing what they are doing.

if you abide by a few basic principles (keep your wallet cold, actually read through smart contracts before executing them, read the specification of everywhere you are putting your tokens) you'll be just fine.