If you haven't noticed, all the regulations and KYC are so far doing is slowing down progress by making it harder to do business if it involves cryptocurrencies. I don't see how it's supposed to lead to 'mass adoption'.
The people suggesting this are operating off the idea that the IRS is "exposing" 150 million people to cryptocurrency. They obviously don't realize that we are way past the "awareness" phase.
The 150 million people who file Schedule 1 every year have already heard of Bitcoin before. If they haven't bought any yet, this question might scare them away from it. Nobody wants to attract the attention of the IRS.