I think still there are reasons to be more optimistic than you, @OP.

From what I have read about development in this last year, at least the current Core team seems to be still defending the decentralization paradigm. When looking at sites like Bitcoin Optech, there are some features in the pipeline which would improve privacy, as Taproot already did. For example, the currently discussed CISA idea (Cross-Input signature aggregation) would make CoinJoins very cheap and basically they could become the standard way to transact. This would give Bitcoin a level of privacy which could almost be compared with Monero.

@death69 nailed it though. The community needs to concientize itself regularly about the core values. The X discussions @OP mentioned are indeed quite frightening when we look at parts of the community for whom "security" seems to be more relevant than "privacy". This is however unfortunately a trend in whole society.

Perhaps it helps that people need to realize that censorship resistance -- which is only achievable if Bitcoin respects privacy -- is valuable. It is one of the features which differentiate Bitcoin most from traditional digital payment solutions. To say it in marketing terms, it's a core Unique Selling Propositiion (USP). This means if Bitcoin loses this characteristic, it will be less valuable, it will have less use cases.

I often bring up the example of opposition movements in dictatorships, but anyone disagreeing with an even slightly authoritarian government (let's say something like Turkey) is at risk of authorities' actions like confiscation, surveillance and censorship. But even if you live in a democracy, governments can deteriorate and become more authoritarian.

Bitcoin "with privacy" is a tool against authoritarianism. Bitcoin "without privacy" is not. If a Bitcoin "without privacy" is at $1,000,000 but you get your BTC confiscated because you posted something on the web against the government, are you more happy with that than with a privacy-supporting Bitcoin at 100,000$?