Why is everyone so worried about China and the 51% attack? Let's say this happens... what will happen?

1. Everyone will sell their Bitcoins {Why would you want a currency that can be double spent?}
2. No merchant in his right mind would accept Bitcoin as a payment method.
3. Centralized control would be the end of Bitcoin
4. People would stop mining
5. People will not host nodes anymore

The whole network will collapse and the Chinese will be left with a whole warehouse full of worthless hardware.