It’s true that everyone can’t have their own UTXOs. However everyone could hold their own keys if we adopt densification measures (such as the various covenant proposals).

Even then though, it’s infeasible to have everyone using their own keys to do L1 daily transactions. Fortunately, shared UTXOs offer L2 scaling. Lightning is one example.

We must protect #Bitcoin decentralization. We do this by densifying to make ever more efficient use of precious block space.