Is there actually any advantage to having a dynamic pool of IP addresses like this? Associating a number from your IP block to a subscriber number seems far, far simpler and better.

Locality/size of routing tables. If you had a hundred million subscribers with fixed IP addresses moving all over the country, you essentially could not aggregate any routes, but would have to have a hundred million routes in your routing table, and/or you would have to push all the traffic from and to all subscribers through one central router, which in particular would add latency for any subscribers that currenty are at the other end of the country.

If you’re suggesting each subscriber gets a static IP then that’s much worse for privacy.

I'm speaking from the provider's point of view: they don't care about privacy. In fact, in the US there is a federal law that requires them to be able to associate network activity with a subscriber at the request of law enforcement.