The "property owned by LLC" issue isn't a _huge_ problem until it's abused. LLC fixes a lot of problems with inheritance and probate, etc.
Look at the property records for Woodside (a city zoned _only_ for residential mansions). Everything is an LLC, but most of them are under the names of the owner (e.g. "Betty Big House LLC") with traceable property tax records.
The strange thing about Woodside LLCs are seemingly nobodies own them. Why does the "philanthropy administrator" at Stanford own a $20 million estate in Woodside? Blarg. It's really nice house too: http://www.trulia.com/homes/California/Woodside/sold/7397232...