Ian:
Great letter! I agree that the "stop campaigning for bitcoin's destruction" message might backfire, and the message should be "we're an innocent bystander here." You might even offer to help law enforcement better understand bitcoin so they can develop tools and techniques to catch criminals who use it.
If you're stance is seriously to encourage "help[ing] law enforcement better understand bitcoin so they can develop tools and techniques to catch criminals who use it.", then you are a threat to the idea of bitcoin. How can I have any confidence at all that you are not attempting to put some sort of backdoors into the client to monitor and track people who use bitcoin?
I don't think that is what Gavin meant, because education works both ways. For instance, you can point out the ridiculousness of relying on the bitcoin block explorer because bitcoin (private keys) can be exchanged offline on USB sticks or BitBills. Also, education on 'remailer' and 'mixers' would demonstrate to law enforcement that it is impractical to rely on the block chain.
Furthermore, I don't think any of us would mind helping law enforcement or in fact anyone to help and find
real criminals behind
real crimes. Bitcoin is not anonymous - you have to go to great lengths to make it such. Now power to decide who gets caught and who doesn't is tilting to the rightful owner - honest and rational people. Not some bribed politicians or criminals on wallstreet.
Intel community is very good at catching real criminals and there are numerous examples of it