Its ok if bitcoin forgets it has ever pretended to have some form of privacy, in israel they seized like 30 hamas bitcoin wallets, unstopable money until it touches centralized exchanges!, russia doesn't need go to after its protesters when they are protesting they just go after the event thanks to face recognition and put them in prison, just like how easily is to track bitcoin, we need to make bitcoin goverment complaint because otherwise how are we goikg to protect the usa treasury from tax avoiders and ilegal transactions that aren't using the usa goverment banking system, we want fiat and bitcoin to be coexistant so while the state can't stop unstopable money we want it to be able to surveil and make bitcoin the cbdc we feared, also we want bitcoin pools to be ofac complain, long live the american dollar.
I agree with your sarcastic take here. I don't think it's critical that the bitcoin base layer be private; its pseudonymous nature, security, auditability, and stability take primacy. But, there is no reason to assume layer 2 solutions won't achieve privacy, and I hope that happens someday. If limited privacy in the base layer soothes governments, so be it, but that shouldn't be a focus for future developers.