I agree.
Btc was rather novel when it was first created and a rather ingenious solution to the problem of securing a digital currency. And, truthfully, bitcoin is secure.
But as others have said, it's not truly fungible as all transactions are recorded. In theory, because all coins are "melted" into each wallet, they are practically fungible over dozens of transactions - but the only way the block chain knows what transactions are legitimate is to reference previous transactions proving the address has been credited the amount. So if a drug dealer pays you for your legal product using bitcoins - technically, it's on record that a portion of the bitcoins you received were from illicit activity.
I think this was an unintended consequence of the system. It could also be argued that the system was designed as an almost anarchist's take on digital currency, and was an attempt at rebuking government and law that would try to police the transactions in the first place.
That said, for those who went full retard in believing it provided perfect cover and were doing nefarious things - it worked out rather well for law enforcement.