Your analysis disregards the evidence of several decades in which the Internet existed, but gambling was still broadly illegal and getting around those laws was anything but trivial (since blocking financial flows is, or at least used to be, pretty effective).
Now it's explicitly legal in many states, and I think this can explain for the recent boom much more than the availability of offshore on-chain betting.
> IMHO private companies shouldn't be trusted with verifying IDs. The government should do that because, you know, they're the ones who issued the IDs.
This requires trusting the government in the first place. Easy in some places; not so much in others.