Heartily disagree. Regulations are what make most hacks possible to begin with. If companies weren't required to store so much of our personal information and payment details, there wouldn't be as much for hackers to steal.
It is one of drawbacks but we should consider why we chose centralized exchanges and later have to fullfil their KYC request. If we don't use them, we will not have to worry about KYC and will not have to submit any document.
Take this place, for example. If this forum gets hacked, I don't have to worry about identity theft (my real-world identity, that is) or someone getting a hold of my payment details. Aside from my IP address and an email address, my personal information is not tied to this website. That's a rare thing these days.
You can customize your account settings for Privacy too. Forum has limited time to store data, then move it to archive. Later, there will be time to delete it from Archive as well. It takes two years (maybe I am correct with this info), to have data totally deleted.
Also there are traces on the Internet, with web scrapers and archive pages.