It is needed by these ICOs especially when an ICO is based on U.S this is because the SEC has prohibited the U.S citizens to join any of these scammy ICOs,they are just protecting themselves from a threat.In the otherhand ICOs are asking for KYC verification so they can verify if the investors arent from U.S and China so there will be no conflicts between the two.There are some downside with the KYC verification,you wont have any privacy,your id might be sold to others,and it might be used to identity thefts,either way you will still have chance to join or not to.
Unfortunately yes. Sensitive private information is actually shared to an absolutely new businesses.
There is absolutely no guaranty that it won't be sold to someone else later.
And even US based ICO cannot guaranty certain level of confidentiality.