KYC can ruin your life. Even without the crypto side of things, KYC documents are sold on black markets constantly. Having your identity stolen can leave you hundreds of thousands of dollars in debt for loans or credit cards you had nothing to do with. The latest studies have shown that identity theft costs US citizens alone over $50 billion a year:
Does that mean that that this country and the whole population is f-ed? Well, I can't fund much information if this leakage caused any significant damage to their population because I have no idea about their language and there is little information in English language about this info but I idk, maybe they faced problems, maybe not, can't be 100% sure.
How can one take loan with my identity? I mean, banks don't give away loan so easily, I can't really think that someone can do anything with pictures of my ID card, at least I'm unable to do things with it alone. Absolutely everything I have done and everything I have been in touch with, always requested more than just an image of ID card.
I know that I don't want someone to know what I do with my finances and that's why I also use cryptocurrencies but I would say that my favorite is Monero and not bitcoin because I don't feel secure with it, blockchain is like an old Telephone directory where everyone can find and track absolutely every transaction. Btw one can still pretty much make things hard by using mixers, coinjoin but for superior security, I prefer Monero but I don't actually need it, so yes, I agree with you, that's why I use Bitcoin but with cautious. It's widely accepted though.
So, when it comes to KYC, my only fear is that someone will know what I bought, how I spent my money but I don't think they'll be able to threaten my or do something with me.