Bitcoin has a public transaction record but the parties are nameless. All you see is times and amounts. And cryptocurrency mixers make those not very easy to trace.
Also, "solving" it by doing anything that would only cause criminals to switch to something else that already exists doesn't really solve anything, does it?
Bitcoin transactions are not nameless in practice because people will nearly always interact with exchanges and merchants. There is so much information from that. Mixers and CoinJoins don't work well enough when used by a small percentage of people, and they will cause redflags in AML analysis systems. Privacy is already being priced out as the transactions fees rise, too. With strong regulations it will enable surveillance on scale greater than anything we have seen before.
Terrorists and such will just use something else, sure. However, lack of liquidity and network effect will be problematic. I would be comfortable saying that stopping them is an excuse rather than the real goal - mass surveillance on citizens. Same with how the government is intent on complaining about end-to-end encryption apps like Signal when the real terrorists will just use PGP.
Also, "solving" it by doing anything that would only cause criminals to switch to something else that already exists doesn't really solve anything, does it?