You can’t control what ends up in the chain as a node if miners choose to accept CSAM off band. Consensus changes are not needed to prevent the chain from becoming littered with CSAM in a format that throws plausible deniability out the window. It’s not hard to grasp.

When people reasonably believe the government will put them in jail because they are hosting illegal content on their server guess what will happen. They will stop running nodes. At which point we become centralized and rely on third parties to transact, and all for what?

“Well that’s an unlikely outcome, isn’t it?” Why are we rolling the dice? What is the great benefit?

Again, it’s not hard to see the risk reward balance is off.