Lack of fungibility seems to be a double-edged sword. The transparent ledger means it's not a safe harbor for criminals, which would be a much easier argument to make of something like Monero if it was threatening the dollar. On the other hand, I think it's reasonable that even non-custodial bitcoin, despite its sound money qualities, could be co-opted by a surveillance state. From my research, Whirlpool and lightning aren't really enough to guarantee privacy unless you really know what you're doing and are exceedingly careful.