They did not know the crypto landscape would change this much. At the time of the ICO of Tezos, requirements like KYC were not common. I've participated in many ICO's back then and no other project carried out KYC.
Times have changed and Tezos want's to be on the safe side.
Imagine this ..
You give the TEZOS ID over they check your wallet THEN me your friendly Tax officer checks how much
you donated to TEZOS and then check your bitcoin you donated and from the bitcoin donated i check every transaction you ever made ..
NOW WAIT FOR IT imagine you had 5k bitcoins 3 years ago DID YOU PAY TAX? ..
So now if you never ME your friendly TAXMAN can now say you owe me for this much also if you cannot pay i strip your house of it's contents plus i will sell your home to cover the cost..
OH and by the way this LAW OFFICER wants you for TAX EVASION ..
Your signing up to a tax tracker and if you haven't payed your tax your DONE..
Oh yes you are SO WHY THE NEED TO CHECK if your decentralised ?..
For terrorist drug monies ? ..
So why not build everything CENTRALISED ?..
A database can store way way way more plus faster plus no transaction cost plus harder to hack
NO NO NO your asking for PHOTO ID your CENTRALISED <
Do you not get it WHY WHY WHY build a slower higher costing ecosystem ?..
A centralised DATABASE is way more cost effective plus harder to HACK ..
Makes no difference now your CENTRALISED FACT ..
I think it be better BUT not as a blockchain it defeats the OBJECT you DOUGHNUTS ..
No transaction cost at all ..
But as soon as you sign your ID you will be tracked from the very first BITCOIN you ever held ..
Am alright ..I still poor ..