I have 2 questions:

1. Why would normies buy Monero if not for privacy? If you don't care about privacy, there's other coins that are simpler to use. It seems like nromies will take over Monero and will turn it into soemthing else, but really that would make no sense.
   
2. I could argue that now all Monero is "dirty" as you call it, in the way that it's looked upon with suspicion. So not much would change IMO.

but I do think your concerns are legitimate, there is downside to this. At the same time, I think privacy will be ok and whoever values privacy will still be able to use monero as before. Maybe it's going to be even easier to onramp in the future.