It helps breaks fungibility.

It's not like PGP at all. It's more like a jpeg of your driver's licence attached to every UTXO you own. (Although it will probably just be text not pics)

"They" do not want us to have privacy.

I suspect the suits will lobby congress to outlaw bitcoin transactions that do not have the DID inscriptions attached.

You'll still be allowed to buy bitcoin derivatives(ETF's) but making on-chain bitcoin transactions without the DID attached will be a crime.