Good point, I haven't played games much since the late 90s and I'm returning to gaming only now (partially thanks to Proton), so my experience with multi-player is based mostly on modem or LAN parties with friends, where the social aspect helped to prevent cheating. I guess it's very different now when you can play with random people on the other side of the world.
Maybe that trade-off should be more flexible and dependent on the "league" a given player wants to play in. The criteria could be more strict for the "pros" where cheating can lead to significant gains, like professional athletes who have to pass regular anti-doping tests, but you wouldn't expect the same invasive checks from (for example) people participating in a charity run.