If your concern is effective taxation, there are plenty of methods that worked historically while preserving financial privacy like property taxes.
By making non KYC transactions easier, above becomes much easier and crime, fraud, scams and corruption significantly more profitable.
Stablecoins' success is also a reaction to the ever-increasing friction created by overreaching regulation. If you have a supplier in China, and need to buy some in-demand goods, you can sign the contract and send the money now, whereas with the classic banking system, you'd have to wait for two weeks to clear everything. This alone is brilliant and should be welcomed for its usefulness.
I think it would be wholly better, in democracies, if we changed laws we didn’t like than tried to create technology to evade them.
The main proponent that dictates the regulations, the FATF, is a shady, unregulated body that is used for political and economical repression.
Not all blockchains are decentralized, it depends on the consensus mechanism
Almost all the crypto I have is from p2p or freelancing. Very few could connect my identity and my wallets.
Drugs should be legal, so that's not a problem. Terrorism and human trafficking are more complicated topics, but basically I think they should be attacked more directly, not financially.