While it's possible to generate a new wallet to mask who the user is, the transaction flow can be traceable. This seems easier to trace than the flow of money through our banking system.
Yes, the BTC can be traced, but they cannot be associated with physical people until they identify themselves. Your anonymity is limited by trustworthiness of the person selling you the coins and the person you are buying physical goods from.
While it's possible to generate a new wallet to mask who the user is, the transaction flow can be traceable. This seems easier to trace than the flow of money through our banking system.