> you're going to be hit by ATM (read: middleman) fees every single time.

This is highly country specific. In many countries, (at least domestic) ATM withdrawals are still free.

> you massively increase your risk of getting hit by identity theft via compromised ATM.

What exactly does a compromised ATM do in terms of identity theft that a POS terminal can't do? Both can read your card, which today is not a big problem anymore, and certainly not yours or your bank's.