I will provide a detailed answer a bit later, but the short answer is that anonymity and untraceability are not major selling points, as experience shows. After all, ATMs could easily record and match to the user the serial numbers of each banknote they hand out, yet, there seems to be no preference to coins vs. banknotes.
The major selling point, as noted in the paper and in the presentation is that the security (and hence the transaction cost manifesting itself in the effort required for each transaction) scales with transaction value. For paying pennies, you just type, say, 12-character codes. Yet, if the transaction value warrants it, you can have a full-fledged, digitally signed audit trail within the same system. And it's completely up to the users to decide what security measures to take. Another important issue is that you never risk more than the transaction value. There is no identity to be stolen. So, in short, the selling point is flexible and potentially very high security against all sorts of threats. Someone finding out who you might be is not, by far, the most serious threat in a payment system. -- Daniel