It is possible that Bitcoin will die just look at what happened to e-gold, I remember having an e-gold account and then they suspended use of e-gold. I think that's the reason why Bitcoin was born.
E-gold was banned due to NSEL and bitcoins cannot be compared to this situation. Also, the e-gold was converted into physical gold while bitcoins cannot be converted into physical bitcoins or fiat cash as it is not even recognized now.
Bitcoins will only die if the value falls and not even when it is termed as illegal.