Despite the fact that Wasabi 2.0 made CoinJoins more affordable for the average user (one no longer needs 0.1 btc to participate) , the volume of mixed bitcoins continues dropping steadily.
Source:
https://www.bitcoinkpis.com/privacyAnd the others tend to already blacklist mixed funds as a whole (which is utterly stupid), or go by "shades of gray" (I don't know how to say it better) and by the rule "the stream's water can be considered clean if it went over 7 stones" (again, I don't know how to say it better and more concise).
Which is another good point as to why blacklisting is just plain wrong, in addition to the point I made above in which it is all based on guesswork. What happens if I combined a tainted input with a clean input in the same transaction? What about a tainted input with 100 clean inputs? Are all the outputs still tainted? Are they all 1% tainted? What about if a tainted input moves through 5 transactions? What about 100? What about 1,000? Is it still tainted? When does it become clean again? We've been able to trace some stolen coins to Binance. Does that mean the entirety of Binance's hot wallet is tainted? Or does the taint magically disappear once Binance have touched the coins?
Go far enough in to the future, and
every bitcoin in active circulation will be tainted in some way or another.
Curiously, I used pretty similar reasoning as you when tried to explain why it is utterly stupid and absurd to deem bitcoin transactions or particular UTXOs dirty, tainted, or non-fungible.
Another shower thought about tainted bitcoins and why it is pointless to call certain bitcoins dirty, illegal and for criminals. Imagine a transaction coming from twitter hackers, for instance. All the UTXOs involved in given transaction are now considered illicit. All bitcoins are now dirty. But what about a fee hackers need to pay in order to have their transaction mined?
Basically, imaginary twitter hackers used dirty bitcoins to incentivize miners, they merely bribed them. Fees is a part of coinbase transaction (coinbase transaction is a transaction with which miners are paying rewards to themselves, it consists of block subsidy (new bitcoins) + transactions fees (sum of all commisions from all included transactions).
What is really interesting about a coinbase transaction is the fact it does not consume any existing UTXOs. What it means is that surveillance company like Chainalysis cannot figure out what part of fees included in coinbase transaction is still dirty. Now they have to call all bitcoins from given coinbase transaction illicit. Even "virgin bitcoin" can now be called illicit because some of the transactions included in a block were involved in criminal activity.
Mining can now be considered a means to launder money, since miners take dirty bitcoins and return clean ones via coinbase transactions. Every block is now tainted, demonized and is potentially serving criminals. Bitcoin is a tool for criminals. If your transaction is in the same block as imaginary twitter hackers' one, you are in trouble, you are criminal.
But I came to a different conclusion, namely, that eventually, given bitcoin's active circulation, all coins once again become "pristine" since they are continuously being "laundered" by miners via transaction fees. I think this is part of the reason why mining in general and PoW, in particular, are being targeted by the ESG mafia - this is essentially a legal and very efficient way to get rid of "dirty" bitcoins and thus destroy completely stupid narratives of taintness and non-fungibility of money.
However, if miners stop acting, as LoyceV put it, "as if bitcoin is fungible" (e.g. reject transactions from OFAC list or refuse to build block-candidates on top of blocks containing transactions from such addresses), we are in trouble.