That ideal became tantamount to enabling genocide when the US government breached the confidentiality of the census in order to prison camp the japanese on the basis of their race.
> I understand why people decide to diminish all state capacity
It's not even just a question of "all". The state should have the absolute minimum capacity to carry out its necessary tasks. Collecting race (just to give one example of many) of any form is not absolutely necessary and so it should not be done.
> they feel that governments are populated by their opponents who will use state capacity against them
Because they may be in the future. -- but even that is too strong, the greatest harm perpetrated by state actors has consistently come from trying to "help" rather than intentionally malicious acts.