I don't see any reason for governments to illegalize Bitcoin.
It doesn't break any laws.
"Bitcoin is just an alternative economy and ideally people should be able to exchange goods in alternative economy if they so choose."
So governments should leave Bitcoin alone.
You didnt find out what is the main reason in behind the scene for illegalize Bitcoin by government. First of all Bitcoin is a virtual currency and its a decentralized ecosystem. That's is big factor for majority of the governments. Because your every transactions are created anonymously how government will be track? Even Bitcoin isnt controlled by any recognised bank or institutions.
Due to anonymity and decentralized aspect which is the main reason why most government do really hate up or oppose bitcoins existence.
Anonymity is one of the primary reason where these feature can be used up by people neither on good or bad ways without being detected.
We have seen countries already banned up Bitcoin/Crypto due to these reasons but somehow there are other countries do the opposite side.