Not necessarily. For example, PayPal has recently introduced "acceptable use policy" where they can freeze your account without you violating the law. Banks also have done the same for being "racist", "sexist", "anti-vaxx" etc. All of those things are perfectly legal in the US. So your assertion that only illegal activities require use of crypto is false.
And that's before we get to the fact that just because something is "illegal" doesn't mean it's good to have this banned. Pretty sure the ongoing Iranian protests are illegal.
No, but it means that the question has nothing to do with money. Using BTC to launder or evade tracking for a transaction that is illegal is simply committing another crime. If you want to be free of prosecution, talk to your government, don't just cheat and figure it's OK because it's crypto. That's how you end up in jail.
As for your suggestion to "talk to your government", yeah I'm sure that will go down well with the Iranian regime trying to crack down on anti-hijab protestors.
What you're doing is extrapolating from "some people sometimes have trouble with a bank" (true) to "the only way to evade oppressive banking censorship is crypto" (bananas).
Or rather, the second frame is true, for a certain subset of transactions that happen to be illegal.
3. The exchange rates are rarely market rates with most platforms. I think Mastercard/VISA is as good as it gets when exchanging. With crypto the downside is wait times, if you don't want to pay a high fee you don't have to.
2. That part is true, largely. You do have to pay a (very large!) fee for the transaction, but it's not to anyone in particular and they don't know any more than the rest of us do about what you're paying for (which, again, is not completely anonymous!).
3. This part is laughably wrong. Even now, post-crash, transaction fees are measured in multiple dollars per. During the boom, it was routine to see entities paying more than $100 to get a transaction to post.