Also, unlike traditional banks, there is absolutely nothing preventing someone from reviewing that transaction record. No need to ask a judge for permission, no need to ask the bank to reveal records, no need to let anyone -- anyone -- know what you are up to.

I believe it takes relatively sophisticated analysis (ie the kind of real world snooping that state actors do) to tie someone to a particular address without them publishing it. Just because there is this huge theoretical vulnerability doesn’t mean most blockchain transactions aren’t secret from even smaller states.