I don't think this is a fatal blow. Bad press is still publicity. In three months, or a year, all that will matter is that the name bitcoin got out, not what exactly happened.
+1 Bingo!
Yeah, merchants are all going to be like "Bitcoin? Yeah I remember a bunch of negative publicity about that while back...or, was it positive publicity? Oh, who cares now, let's use it! Seems like a great idea!"