KYC sucks and is harming Bitcoin. But it's a UX problem that can be solved for 99% of people. It is even possible for non-custodial Lightning to have a UX that's acceptable for mainstream users?
Phoenix, Breez, Aqua, and countless other self-custody solutions already present an excellent UX for mainstream users. But, you do lose a few things that always online custodial solutions offer like lightning addresses and zaps. Can be fixed/there are workarounds but we leave the "mainstream user" territory from there.