Good points! Yes, public blockchains are often not suitable for private or confidential transactions. That being said, anonymization tools do exist, which can solve this problem for many use cases.

Also, I agree that blockchains only work in the context of a functioning legal system, in that the link between on-chain assets and physical assets must be enforced via some legal or governmental mechanism. This should be possible using contracts under current law, however, and such contracts could be limited to establishing this linkage, avoiding more complex issues that might otherwise come into play if it were not for the use of a blockchain for record-keeping, transfers and settlement.