Nobody is being prosecuted on the basis of blockchain analysis data alone -- what I mean is that the data is good enough that that it provides information valuable enough to find the criminal in meatspace with the related physical evidence.
e.g. police look for online drug dealer with blockchain data, get warrant, bust down door, find big pile of drugs.
The point being, the data might not be "proof" on its own but it absolutely illustrates that there is no privacy on public ledgers.
depends on the wallets you use and what you do with them, being able to identify criminals is honestly a plus and if you really wanted to you could make their job *really* hard if you wanted to truly hide from an abusive government. Not being able to hide huge transactions in the millions / billions is honestly a good thing. Imagine the transparency we could get if all governments used crypto currencies instead of the walled garden that is SWIFT.