I don't think "design philosophy" will be enough, though. The points to make might be more like: is the regulation in normal finance fit for purpose? Should there be an electronic version of cash within some limits and could that be partly done with crypto (same discussion as with CBDC at the moment). Should there be a difference between an individual miner and an industrial one?

Failing financial systems can have huge social and policy implications so technical merit is but one consideration.

Yes: because that design philosophy is counter to that of consumer friendly, regulated markets. What will make bitcoin mass market is the ability of regular investors to get involved with the kind of safety net regulations require. The alternative being that bitcoin maintains its already shady reputation as something for money laundering and buying drugs (crack, perhaps?) online. Cleaning up that reputation and its causes is the job of regulation, and it will work.

This proposed regulation doesn't address the problems you evoke, and its an attack on fundamental human rights such as privacy.

[1] https://www.forbes.com/sites/haileylennon/2021/01/19/the-fal...

The regulatory system, and people who are ok with deferring to it in its existing incarnation (i.e. the revolving door between people within TBTF bailouts-every-day with "open" "market" operations banks [where these cash dollars inevitably end up] and the people who "look" after them system), are fine with this because slaps on the wrists and fines are considered the cost of doing business and there can't be anyway possible to live and exchange value without them being involved under the guise of "protection" or "else" racket.

Robin Hanson would probably call this phenomenon a form of "Elite Tax" on society. [0]

[0] https://www.overcomingbias.com/2021/08/how-high-our-elite-ta...