What makes a government powerful, the economy they've developed. This happens through various sources, and through different law enforcement that benefits people as well as the government. This lets the entire country to obey anything and everything put forth by the ruling government broadcasting their majority. When everything happens through the decentralized means the importance of government will get affected. This is the understanding, but I believe governments won't miss their importance if they're doing right things to the people. Just on two factors such as terrorism and unable to tax the users government finds it to be a threat.
That is true, governments cannot lose the control of their currencies at the moment. Nowadays in the world it's a pivot point to everything else. If they lose the currency the governments themselves might extinct. That is why they're trying to create their own coins now and market it as decentralised. However, people thus far have found out that bitcoin is the only currency that is worth holding and using.