> ...why must privacy extend to online?

Because "online" is just as real as "offline"? It's all people communicating with other people.

In the US, I can do business under an alias, just so long as I'm not assuming that alias with the intent to defraud. In the US, I can anonymously drop a letter in a postbox to be sent anywhere in the US.

However, government agents can certainly discover my "wallet identity" in both of those situations with the application of some effort. Why would it be important to you that people doing business "online" must do that business in such a way as to make it require zero effort for a government agent to discover their "wallet identity"? Why would it be important to you that people who conduct their business electronically have far, far less privacy than people who conduct their business with paper and in-person appearances?

Governments are more scared of "online", because their shenanigans could be exposed instantly, and to many more people than with the "tech" available before (speaking in person, or paper letters).

Freedom to speak in person is like a fist; freedom to post online is like a gun. They don't want us to have guns, obviously.