Bitcoin isn´t big/stong enough to really disturb government and big banks, probably a minor incovenience by now, we see some talks about regulation here and there, but nothing concrete.
But as it gets more popular and a direct impact in their operations start to appear, it´s reasonable to think action would be taken, even making it illegal.
Sure they won´t be able to seize our bitcoins, or stop transactions, but this won´t matter, the support and general belief will suffer major damage, price would crash to hardly recover ever again.
US took down major and global poker sites overnight due to suspicion of illegal activities around it, why should be different with bitcoin ?
When it comes to bitcoin, an outright ban have proven not to be effective and I don't see how that will because that will mean shutting the government from getting revenue from what could make money for them and giving a room for people to stash their funds elsewhere because only you break bitcoin technology or shut down the internet can stop it and a major crackdown will consume lots of resources. So, the best option is regulation which might be tough but still achievable.