It doesn't by itself, but it's a much better start. You can simply match up addresses with activity from other digital systems. That link is present in a global, transparent, up to the minute, cheap to ingest data source (the blockchain).

Comparing that to any other payment system (or combination of) where there is due process in collecting this information (hopefully accurate and valid) you're going to have a much easier time developing tools to detect and alert with Bitcoin.

So you need is a financial institution to give you unrestricted access to their records. And it can't be just any financial institution, it has to be the one used by the person you are targeting. And you don't know what financial institution that is because you are still trying to identify who the address belongs to. So really all you need is unrestricted access to many financial institutions' records.

If it were easy to trace, the identity of Satoshi Nakamoto would be known, wouldn't it?

Once “he” moves his coins, it very well may be.