I haven't seen anyone say that. Why can you do those things with a blockchain but not non-blockchain, settled ledgers? Seems like it boils down to rules and who is enforcing them rather than the tech.
Correct. Blockchains are for regulatory arbitrage. The entirety of the efficiency of any blockchain depends on the regulatory environment. If drugs and gambling were legalized tommorrow, across the Internet connected world, no one would mine, and blockchain would die.
I'm focusing on the other end of this. Couldn't those blockchains or at least those related to criminal activity be made illegal, controlled via regulation, or seized? I don't see how a blockchain is immune to this if people ever try to convert it to cash.