Thing is, there are, and will probably always be, enough purely criminal uses for money, where KYC is not a thing, that use of crypto for non-criminal purposes will be able to work too: criminals will function as "entry and exit nodes" between cash and fiat, and between them, legit users will just operate with crypto.
Fiat is based on people's trust with governments. Crypto is based on people's distrust with governments...
If you're relying on criminals you already have excluded widespread/mainstream use.
The question is not if "crypto is a novelty that enables some people to go around some laws" - everybody can readily agree to that. The question is whether it is a systemic force/ agent of change, that can e.g. prevent enforcement of some kind of laws forever and thus have long-lasting societal impact. I think the jury is very much out on that. (and no, you can't rely on criminals as exit nodes if you claim to be an unstoppable agent of change)
Fiat is based on people's trust with governments. Crypto is based on people's distrust with governments...