I'm ok with 'less traceable' and I suspect the general public will like where bitcoin fits in too..
ie It's traceability lies somewhere in between that of cash and creditcards.
That a government can use sophisticated correlation methods combined with a few subpoenas and cooperation with other governments, ISPs and bitcoin intermediaries to eventually track down the worst cases is probably going to be seen by many as a good thing.
Unless what you're doing is so serious that it warrants a decent amount of government resources to investigate - then the existing level of anonymity available is probably just fine for the average privacy-conscious individual.
It does seem that the media picks up on the semi-anonymity as if that's a flaw. That is probably because there have been many lazy descriptions of bitcoin as 'completely anonymous', even by community members who should know better.
It's plausible, but I'm not convinced that 'an enormous part of this actual community wants an untraceable paying method'.
When/if large bitcoin service providers (such as mybitcoin.com?) disappear with community members bitcoins - I bet many will be happy for there to be some trail for law enforcement to follow.