Early first-person shooter games had this figured out (small servers with 20-30 regular players, the server admin could choose to ban you), RTS games have this figured out, many MMOs have this figured out (interact with non-friends sometimes, but they have to 'join your party', etc.)
Playing with random strangers on the internet who may want to grief/destroy your game, be incredibly toxic, or cheat against you in general.. that's the cost of playing with random people in a completely public forum.
Nah. Consoles were a decade late to the online gaming party, and online gaming on consoles (counting Xbox Live as the first concerted attempt) has only been around half as long as consoles as a product segment have existed.
The sibling comment makes a point about anonymity, I find these discussions interesting in comparison with the only online competitive game I play these days. It's Tekken, and neither the current rendition nor the previous one had any real form of anti-cheat. For the current Tekken 8, supposedly some players have been banned after manual review from the company of replay data, which of course doesn't scale. But at the same time it doesn't really matter. Cheaters don't seem to be that prevalent, their ability to spoil the experience of a match is limited by the fact that matches are short, and people can spoil the experience in non-cheating ways like plugging, lag switching, using a weak computer, and for some sensitive players they'll get unreasonably upset by ki charging/teabagging/taunting/continuing an attack after KO. The status of the highest rank is also not that much -- the most status comes from performing well at the big in-person tournaments, where it's going to be harder to cheat and players are somewhat de-anonymized. If the positive incentives to cheat are minimized in the first place, you don't need so many negative incentives like rootkits.
(It always amazes me how custom controllers and even keyboards are allowed in fighting game tournaments, officially certain macros are banned and at least for Street Fighter certain modes of leverless controllers got banned, but it'd be hard to perfectly enforce. And it's been hilarious to see the increasing use of fake buttons or controller-hiding covers/jackets because it was assumed some players were able to see inputs out of their peripheral vision before they were registered in-game and adjust.)