Smart contract based mixers like Tornado Cash are just code for encrypting transactions. The only reason that a large proportion of Tornado Cash transactions were criminal in origin is that the legitimate parties were largely scared off from using it, because of the legal uncertainty around it, with people fearing what exactly ended up happening - with OFAC sanctioning the actual code - happening.

This left only the bravest parties, and criminals to use it, leading to a high proportion of users being criminals.

If it weren't for that uncertainty about the legal treatment TC would receive from government (say if Congress passed legislation explicitly providing a right to use financial privacy technology), a huge proportion of the whole crypto economy would have been using Tornado Cash, as they should be, because privacy is an absolute bare minimum for a functioning financial system.

The conceptual treatment you're giving transaction encryption is to treat privacy as criminal. This is an ideological outlook that promotes putting total trust and faith in a small elite in government and finance to engage in warrantless dragnet surveillance of every one's financial transactions.